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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 ~~June~~December 3031, 2021

☐ 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 000-00643

CORNING NATURAL GAS HOLDING CORPORATION

(Exact name of Registrant as specified in its charter)

New York	46-3235589
(State of incorporation)	(I.R.S. Employer Identification No.)

330 West William Street, Corning, New York 14830

(Address of principal executive offices) (Zip Code)

(607) 936-3755

(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
None	N/A	N/A

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 and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post 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”, “~~non-accelerated filer”, “~~smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☒ Emerging Growth ~~Filer~~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 Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Shares outstanding as of ~~August~~February 11, ~~2021~~2022
Common Stock, $.01 par value	3,083,577

PART I. FINANCIAL INFORMATION Page Item 1.Financial Statements 4 Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 4.Controls and Procedures 35 PART II. OTHER INFORMATION Item 1.Legal Proceedings 35 Item 1A.Risk Factors 36 Item 2.Unregistered Sales of Equity Securities and Use of Proceeds 36 Item 3.Defaults Upon Senior Securities 36 Item 4.Mine Safety Disclosures 36 Item 5.Other Information 36 Item 6.Exhibits 36 SIGNATURES 37

PART I.	FINANCIAL INFORMATION		Page
	Item 1.	Financial Statements	4
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

	Item 4.	Controls and Procedures	30


PART II.	OTHER INFORMATION

	Item 1.	Legal Proceedings	30

	Item 1A.	Risk Factors	30

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

	Item 3.	Defaults Upon Senior Securities	31

	Item 4.	Mine Safety Disclosures	31

	Item 5.	Other Information	31

	Item 6.	Exhibits	31

	SIGNATURES		32

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1.Financial Statements

CORNING NATURAL GAS HOLDING CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

	Unaudited
Assets	~~June~~December 3031, 2021			September 30, ~~2020~~2021
Plant:
Utility property, plant and equipment	$	~~146~~153,~~600~~072,~~015~~858		$	~~139~~150,~~743~~540,~~289~~525
Less: accumulated depreciation		(3334,~~303~~450,~~384~~939	)		(3034,~~853~~001,~~644~~558	)
Total plant, net		~~113~~118,~~296~~621,~~631~~919			~~108~~116,~~889~~538,~~645~~967
Investments:
Marketable securities at fair value		2,~~358~~445,~~116~~654			2,~~193~~337,~~112~~330
Investment in joint ventures		~~261,341~~-			~~264~~261,~~640~~180
		2,619,457			2,457,752
		2,445,654			2,598,510
Current assets:
Cash and cash equivalents		~~291~~205,~~578~~650			~~411~~333,~~700~~846
Customer accounts receivable, (net of allowance for uncollectible accounts of $94,412 and $42,236, respectively)		2,653,707			2,330,342
Customer accounts receivable, (net of allowance for uncollectible accounts of $137,337 and $82,040, respectively)		4,732,265			2,481,456
Other accounts receivable		~~606~~601,~~200~~154			~~527~~748,~~280~~655
Related party receivables		-			9,032
Gas stored underground		1,384,810			1,366,341
Gas stored underground, at average cost		789,251			995,341
Materials and supplies inventories		3,901,594			3,605,300
Materials and supplies inventories		3,481,878			3,156,345
Prepaid expenses		1,209,294			1,746,336
Prepaid expenses		2,145,320			1,801,883
Total current assets		12,034,767			10,281,934
Total current assets		9,967,934			9,231,923
Regulatory and other assets:
Regulatory assets:
Unrecovered gas and electric costs		12,~~614~~714,~~841~~323			1,~~966~~986,~~184~~198
Deferred regulatory costs		5,~~826~~757,~~309~~087			46,~~894~~112,~~434~~370
Deferred pension		74,~~510~~889,~~129~~585			74,~~352~~902,~~839~~666
Goodwill		918,121			918,121
Other		~~723~~708,~~420~~543			~~748~~715,~~408~~981
Total regulatory and other assets		1614,~~592~~987,~~820~~659			1514,~~879~~635,~~986~~336
Total assets	$	~~142~~148,~~476~~089,~~842~~999		$	~~136~~144,~~459~~054,~~306~~747

See accompanying notes to consolidated financial statements.

Table of Contents

CORNING NATURAL GAS HOLDING CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

	Unaudited
Liabilities and capitalization	~~June~~December 3031, 2021			September 30, ~~2020~~2021
Long-term debt, less current installments	$	45,~~094~~186,~~139~~961		$	4446,~~291~~145,~~626~~319
Less: debt issuance costs		(~~240~~231,~~729~~911	)		(~~241~~237,~~057~~162	)
Total long-term debt		44,~~853~~955,~~410~~050			4445,~~050~~908,~~569~~157
Redeemable preferred stock - Series A (Authorized 261,500 shares. Issued and outstanding: 260,600 shares at June 30, 2021 and September 30, 2020, less issuance costs of $22,841 and $30,455, respectively)		6,492,159			6,484,545
Redeemable preferred stock - Series A (Authorized 261,500 shares. Issued and outstanding: 260,600 shares at December 31, 2021 and September 30, 2021, less issuance costs of $17,766 and $20,303, respectively)		6,497,234			6,494,697
Redeemable preferred stock - Series C (Authorized 180,000 shares. Issued and outstanding: 180,000 shares at June 30, 2021 September 30, 2020, less issuance costs of $1,338 and $1,524, respectively)		4,498,662			4,498,476
Redeemable preferred stock - Series C (Authorized 180,000 shares. Issued and outstanding: 180,000 shares at December 31, 2021 and September 30, 2021, less issuance costs of $1,215 and $1,277, respectively)		4,498,785			4,498,723
Redeemable preferred stock - Series D (Authorized 5,000 shares. Issued and outstanding: 5,000 shares at December 31, 2021) less issuance costs of $0		5,000,000			-
Current liabilities:
Current portion of long-term debt		56,~~911~~171,~~190~~645			6,~~271~~407,~~068~~545
Borrowings under lines-of-credit and short-term debt		8,747,610			7,698,269
Demand notes payable		4,900,000			5,397,294
Accounts payable		4,213,469			2,293,980
Borrowings under lines-of-credit		6,971,173			7,668,557
Accrued expenses		275,233			339,809
Accounts payable		5,058,476			3,844,210
Customer deposits and accrued interest		1,053,436			1,617,976
Accrued expenses		241,705			271,461
Dividends declared		530,296			529,301
Customer deposits and accrued interest		1,667,637			1,519,576
Total current liabilities		20,731,234			18,750,403
Dividends declared		530,296			530,296
Total current liabilities		25,540,932			25,638,939
Deferred credits and other liabilities:
Deferred income taxes		8,~~332~~326,~~286~~467			78,~~575~~149,~~832~~853
Regulatory liabilities		32,~~012~~890,~~328~~452			32,~~243~~969,~~054~~076
Deferred compensation		1,~~307~~462,~~916~~974			1,~~366~~417,~~256~~686
Pension costs and post-retirement benefits		97,~~578~~495,~~398~~648			97,~~407~~180,~~774~~088
Other		1,~~452~~029,~~439~~679			~~193~~1,~~945~~344,416
Total deferred credits and other liabilities		2321,~~683~~205,~~367~~220			21,~~786~~061,~~861~~119
Commitments and contingencies		-			-
Temporary equity:
Redeemable convertible preferred stock - Series B (Authorized 244,500 shares. Issued and outstanding: 244,263 shares at June 30, 2021 and September 30, 2020)		4,974,156			4,954,937
Redeemable convertible preferred stock - Series B (Authorized 244,500 shares. Issued and outstanding: 244,263 shares at December 31, 2021 and September 30, 2021)		4,986,968			4,980,562
Common stockholders' equity:
Common stock ($.01 par value per share. Authorized 4,500,000 shares. Issued and outstanding: 3,083,577 shares at December 31, 2021 and 3,083,577 at September 30, 2021)		30,836			30,836
Additional paid-in capital		28,292,551			28,292,551
Retained earnings		7,081,575			7,148,246
Accumulated other comprehensive income		848			917
Total common stockholders' equity		35,405,810			35,472,550
Total liabilities and capitalization	$	148,089,999		$	144,054,747

See accompanying notes to consolidated financial statements.

Table of Contents

Common stockholders' equity:
Common stock ($.01 par value per share. Authorized 4,500,000 shares. Issued and outstanding: 3,083,577 shares at June 30, 2021 and 3,072,547 at September 30, 2020)		30,836		30,725
Additional paid-in capital		28,271,487		28,144,702
Retained earnings		8,940,414		7,747,197
Accumulated other comprehensive income		1,117		10,891
Total common stockholders' equity		37,243,854		35,933,515
Total liabilities and capitalization	$	142,476,842	$	136,459,306

See accompanying notes to consolidated financial statements.

Table of Contents

CORNING NATURAL GAS HOLDING CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

	Three Months Ended						~~Nine Months Ended~~
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
	December 31, 2021			December 31, 2020
Utility operating revenues:
Gas operating revenues	$	57,~~752~~712,~~686~~650		$	56,~~540~~422,~~296~~149		$	~~23,631,357~~		$	~~22,321,855~~
Electric operating revenues		12,~~732~~765,~~254~~623			1,~~448~~897,~~456~~249			~~5,396,020~~			~~4,774,273~~
Total utility operating revenues		710,~~484~~478,~~940~~273			68,~~988~~319,~~752~~398			~~29,027,377~~			~~27,096,128~~
Costs of sales:
Gas purchased		12,~~382~~584,~~120~~750			~~939~~1,~~406~~269,682			~~6,131,547~~			~~5,226,582~~
Electricity purchased		~~478~~1,~~614~~053,752			~~264~~793,~~220~~081			~~1,632,781~~			~~926,888~~
Total cost of sales		13,~~860~~638,~~734~~502			12,~~203~~062,~~626~~763			~~7,764,328~~			~~6,153,470~~
Gross margin		56,~~624~~839,~~206~~771			56,~~785~~256,~~126~~635			~~21,263,049~~			~~20,942,658~~
Cost and expense:
Operating and maintenance expense		3,~~970~~234,~~405~~481			23,~~913~~356,~~808~~754			~~10,820,876~~			~~8,709,529~~
Taxes other than income taxes		~~951~~977,~~837~~647			~~875~~892,~~621~~745			~~2,795,807~~			~~2,755,284~~
Depreciation		~~821~~845,~~642~~840			~~648~~869,~~647~~440			~~2,549,851~~			~~1,948,180~~
Other deductions, net		6164,~~284~~778			~~131~~68,~~895~~044			~~212,351~~			~~391,443~~
Total costs and expenses		5,~~805~~122,~~168~~746			45,~~569~~186,~~971~~983			~~16,378,885~~			~~13,804,436~~
Utility operating income (loss)		(180,962	)		1,215,155			4,884,164			7,138,222
Utility operating income		1,717,025			1,069,652
Other income and (expense):
Interest expense		(1857,~~077,830~~055	)		(~~625~~745,~~281~~445	)		~~(2,568,477~~	)		~~(1,844,268~~	)
Other income (expense), net		965,529			(158,770	)		771,094			(488,023	)
Other expense		(95,501	)		(135,009	)
Investment income		92108,~~282~~499			~~165~~143,~~130~~726			~~361,821~~			~~96,404~~
Income (loss) from joint ventures		5,022			(53,912	)		(2,491	)		(50,442	)
Loss associated with joint venture		(164,003	)		(1,701	)
Rental income		7,638			7,638			~~22,914~~			~~22,914~~
Income (loss) from utility operations, before income taxes		(188,321	)		549,960			3,469,025			4,874,807
Income from utility operations before income taxes		716,603			338,861
Income tax benefit (expense)		461,187			7,645			(682,918	)		(1,158,045	)
Income tax expense		(252,310	)		(155,687	)
Net income		~~272~~464,~~866~~293			~~557~~183,~~605~~174			~~2,786,107~~			~~3,716,762~~
Less: Series B Preferred Stock Dividends		61,065			61,065			183,197			183,197
Less Series B Preferred Stock Dividends		61,066			61,066
Net income attributable to common stockholders	$	~~211~~403,~~801~~227		$	~~496~~122,~~540~~108		$	~~2,602,910~~		$	~~3,533,565~~
Weighted average earnings per share:
Basic	$	0.13		$	0.04
Diluted	$	0.13		$	0.04
Average shares outstanding - basic		3,083,577			3,080,107
Average shares outstanding - diluted		3,087,315			3,080,107

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Weighted average earnings per share:
Basic	$	0.07	$	0.16	$	0.84	$	1.16
Diluted	$	0.07	$	0.16	$	0.83	$	1.11
Average shares outstanding - basic		3,083,577		3,062,789		3,082,408		3,056,806
Average shares outstanding - diluted		3,083,577		3,062,789		3,377,518		3,349,921

See accompanying notes to consolidated financial statements

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CORNING NATURAL GAS HOLDING CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended					~~Nine Months Ended~~
	June 30, 2021			June 30, 2020		June 30, 2021			June 30, 2020
	December 31, 2021			December 31, 2020
Net income	$	~~272~~464,~~866~~293		$	~~557~~183,~~605~~174	$	~~2,786,107~~		$	~~3,716,762~~
Other comprehensive income:
Other comprehensive income (loss):
Net unrealized gain (loss) on debt securities available for sale net of tax of $(114), $1,430, $3,445 and $1,553, respectively		301			3,769		(9,774	)		4,478
Net unrealized (loss) on debt securities available for sale net of (benefit) of ($26) and ($1,056), respectively		(69	)		(3,475)
Total comprehensive income	$	~~273~~464,~~167~~224		$	~~561~~179,~~374~~699	$	~~2,776,333~~		$	~~3,721,240~~

See accompanying notes to consolidated financial statements

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CORNING NATURAL GAS HOLDING CORPORATION AND SUBSIDIARIES

Consolidated ~~Statement~~Statements of Changes in Common

Stockholders' Equity

For the Three ~~and Nine~~ Months ended ~~June~~December 3031, 2021 and 2020

(Unaudited)

										Accumulated
					Additional					Other
	Number of		Common		Paid In		Retained			Comprehensive
	Shares		Stock		Capital		Earnings			~~Income~~ (~~loss~~Loss)			Total
Balances at March 31, 2021		3,083,577	$	30,836	$	28,271,487	$	9,198,511		$	816		$	37,501,650
Balances at September 30, 2021		3,083,577	$	30,836	$	28,292,551	$	7,148,246		$	917		$	35,472,550
Dividends declared on common ($0.1525 per share)		-		-		-		(469,898	)		-			(469,898	)
Dividends declared on Preferred B shares ($0.25 per share)		-		-		-		(61,~~065~~066	)		-			(61,~~065~~066	)
Comprehensive income:
Change in unrealized gain on debt securities available for sale, net of income taxes		-		-		-		-			301			301
Change in unrealized loss on debt securities available for sale, net of income taxes		-		-		-		-			(69	)		(69	)
Net income		-		-		-		~~272~~464,~~866~~293			-			~~272~~464,~~866~~293
Balances at June 30, 2021		3,083,577	$	30,836	$	28,271,487	$	8,940,414		$	1,117		$	37,243,854
Balances at December 31, 2021		3,083,577	$	30,836	$	28,292,551	$	7,081,575		$	848		$	35,405,810

										Accumulated
					Additional					Other
	Number of		Common		Paid In		Retained			Comprehensive
	Shares		Stock		Capital		Earnings			Income (~~loss~~Loss)			Total
Balances at September 30, 2020		3,072,547	$	30,725	$	28,144,702	$	7,747,197		$	10,891		$	35,933,515
Stock based compensation		4,500		45		34,939		-			-			34,984
Issuance of common stock		11,030		111		96,918		-			-			97,029
Issuance of common stock		6,530		66		91,846		-			-			91,912
Dividends declared on common ($0.1525 per share)		-		-		-		(469,897	)		-			(469,897	)
Dividends declared on common ($0.4575 per share)		-		-		-		(1,409,693	)		-			(1,409,693	)
Dividends declared on Preferred B shares ($0.25 per share)		-		-		-		(61,066	)		-			(61,066	)
Dividends declared on Preferred B shares ($0.75 per share)		-		-		-		(183,197	)		-			(183,197	)
Comprehensive income:
Change in unrealized gain on debt securities available for sale, net of income taxes		-		-		-		-			(9,774	)		(9,774	)
Change in unrealized loss on debt securities available for sale, net of income taxes		-		-		-		-			(3,475	)		(3,475	)
Net income		-		-		-		2183,~~786,107~~174			-			2183,~~786,107~~174
Balances at June 30, 2021		3,083,577	$	30,836	$	28,271,487	$	8,940,414		$	1,117		$	37,243,854
Balances at December 31, 2020		3,083,577	$	30,836	$	28,241,620	$	7,399,408		$	7,416		$	35,679,280

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										Accumulated
					Additional					Other
	Number of		Common		Paid In		Retained			Comprehensive
	Shares		Stock		Capital		Earnings			Income		Total
Balances at March 31, 2020		3,059,079	$	30,591	$	27,943,126	$	8,762,553		$	8,022	$	36,744,292
Issuance of common stock		6,870		69		89,121		-			-		89,190
Dividends declared on common ($0.1525 per share)		-		-		-		(467,210	)		-		(467,210	)
Dividends declared on Preferred B shares ($0.25 per share)		-		-		-		(61,065	)		-		(61,065	)
Comprehensive income:
Change in unrealized loss on debt securities available for sale, net of income taxes		-		-		-		-			3,769		3,769
Net income		-		-		-		557,605			-		557,605
Balances at June 30, 2020		3,065,949	$	30,660	$	28,032,247	$	8,791,883		$	11,791	$	36,866,581

										Accumulated
					Additional					Other
	Number of		Common		Paid In		Retained			Comprehensive
	Shares		Stock		Capital		Earnings			Income		Total
Balances at September 30, 2019		3,047,060	$	30,470	$	27,745,837	$	6,634,085		$	7,313	$	34,417,705
Issuance of common stock		18,889		190		286,410		-			-		286,600
Dividends declared on common ($0.45 per share)		-		-		-		(1,375,767	)		-		(1,375,767	)
Dividends declared on Preferred B shares ($0.75 per share)		-		-		-		(183,197	)		-		(183,197	)
Comprehensive income:
Change in unrealized loss on securities available for sale, net of income taxes		-		-		-		-			4,478		4,478
Net income		-		-		-		3,716,762			-		3,716,762
Balances at June 30, 2020		3,065,949	$	30,660	$	28,032,247	$	8,791,883		$	11,791	$	36,866,581

See accompanying notes to consolidated financial statements

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CORNING NATURAL GAS HOLDING CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	Three Months Ended
	June 30, 2021			June 30, 2020
	December 31, 2021			December 31, 2020
Cash flows from operating activities:
Net income	$	2464,~~786,107~~293		$	3183,~~716,762~~174
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2845,~~549,851~~840			1869,~~948,180~~440
Amortization of debt issuance cost		8024,~~657~~460			8027,~~164~~290
Non-cash pension expenses		~~706~~235,~~071~~357			~~706~~235,~~071~~357
Regulatory asset amortizations		~~411~~87,~~708~~728			~~481~~155,~~084~~446
Stock issued for services		75,147			135,589
Stock issued for services and stock option expense		-			45,280
Gain on sale of marketable securities		(~~198~~21,~~392~~764	)		(3126,~~801~~464	)
Unrealized gain on investments		(138,826	)		(73,996	)
Unrealized gain on marketable securities		(72,152	)		(114,258	)
Gain on forgiveness of debt		(1,173,594	)		-
Deferred income taxes		252,310			155,687
Deferred income taxes		682,918			1,158,045
Bad debt expense		52,308			85,185
Bad debt expense		40,383			83,000
Loss associated with joint venture		164,003			1,701
Loss from joint ventures		2,491			50,442
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		(~~442~~2,~~668~~155,616	)		(~~179~~1,~~004~~611,464	)
Gas stored underground		~~206~~(18,~~090~~469	)		~~529~~40,~~775~~662
Materials and supplies inventories		(~~325~~296,~~533~~294	)		(~~484~~121,~~884~~701	)
Prepaid expenses		~~(343~~537,~~437~~042	)		~~(622~~418,~~272~~121	)
Unrecovered gas and electric costs		~~351~~(728,~~343~~125	)		(~~390~~33,~~346~~888	)
Deferred regulatory costs		(1257,~~381,714~~353	)		(~~705~~245,~~225~~867	)
Other		2410,~~668~~142			1510,~~550~~017
Increase (decrease) in:
Accounts payable		1,~~919~~211,~~489~~443			~~667~~554,~~863~~268
Accrued expenses		(6429,~~576~~756	)		(3413,~~236~~463	)
Customer deposits and accrued interest		~~(564~~148,~~540~~061	)		~~(271~~280,~~751~~474	)
Deferred compensation		~~(58~~45,~~340~~288	)		~~(44~~46,~~900~~277	)
Deferred pension costs & post-retirement benefits		~~(692~~93,~~737~~284	)		(~~475~~190,~~283~~638	)
Other liabilities and deferred credits		1(469,~~093,855~~057	)		(~~248~~64,~~037~~755	)
Net cash provided by operating activities		5637,~~546,421~~679			6685,~~010,790~~881
Cash flows from investing activities:
Sale of securities, net of purchases		162,440			183,325
Purchases of securities, net of sales		(14,477	)		(6,303	)
Amount paid to related parties		9,032			(1,588	)
Proceeds from sale of interest in joint venture		100,000			-
Capital expenditures		(6,956,837	)		(5,940,562	)
Amount received from related parties		-			9,032
Net cash used in investing activities		(6,785,365	)		(5,758,825	)
Capital expenditures		(2,928,792	)		(2,378,506	)
Net cash used in investing activities		(2,843,269	)		(2,375,777	)
Cash flows from financing activities:
Net proceeds (repayments) on lines-of-credit and short-term debt		1,049,341			(2,454,233	)
Net (repayments on) proceeds from lines-of-credit		(697,384	)		2,162,565
Debt issuance costs paid		-			(6,602	)
Dividends paid		(530,964	)		(478,219	)
Repayment of demand loan		(500,000	)		-
Proceeds from issuance of Series D preferred stock		5,000,000			-
Proceeds under long-term debt		237,517			1,259,990
Repayment of long-term debt		(1,431,775	)		(1,229,225	)
Net cash provided by financing activities		2,077,394			1,708,509
Net (decrease) increase in cash and cash equivalents		(128,196	)		18,613
Cash and cash equivalents at beginning of period		333,846			411,700
Cash and cash equivalents at end of period	$	205,650		$	430,313
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	633,526		$	813,263
Income taxes	$	-		$	-
Non-cash financing activities:
Dividends paid with shares	$	-		$	51,749
Number of shares issued for dividends		-			3,380

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Debt issuance costs paid		(6,602	)		-
Cash received from sale of Series C preferred stock		-			4,498,394
Dividends paid		(1,540,146	)		(1,382,237	)
Proceeds under long-term debt		5,217,551			3,436,711
Repayment of long-term debt		(3,601,322	)		(3,264,791	)
Net cash provided by financing activities		1,118,822			833,844
Net (decrease) increase in cash and cash equivalents		(120,122	)		1,085,809
Cash and cash equivalents at beginning of period		411,700			314,341
Cash and cash equivalents at end of period	$	291,578		$	1,400,150
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	1,635,383		$	1,764,103
Income taxes	$	-		$	-
Non-cash financing activities:
Dividends paid with shares	$	51,749		$	151,011
Number of shares issued for dividends		3,380			8,989

See accompanying notes to consolidated financial statements

139

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CORNING NATURAL GAS HOLDING CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 – Basis of Presentation

Corning Natural Gas Holding Corporation (“Holding Company”) was incorporated in New York in July 2013 to serve as a holding company for Corning Natural Gas Corporation (“Corning Gas” or the “Gas Company”) and its dormant subsidiary Corning Natural Gas Appliance Corporation (the “Appliance Company”), Pike County Light & Power Company (“Pike”), Leatherstocking Gas Company, LLC (“Leatherstocking Gas”), and Leatherstocking Pipeline Company, LLC (“Leatherstocking Pipeline”). ~~The~~Until December 31, 2021, the Holding Company also ~~owns~~owned 50% of Leatherstocking Gas of New York, Inc. (“Leatherstocking NY”). As used in this document, the term “the Company” refers to the consolidated operations of the Holding Company, Gas Company, Pike, and ~~(from July 1, 2020)~~ Leatherstocking Gas and Leatherstocking Pipeline.

The Holding Company’s primary business, through its subsidiaries, is natural gas and electric distribution. Corning Gas serves approximately 15,000 residential, commercial, industrial and municipal customers in the Corning, Hammondsport and Virgil, New York, areas and two other gas utilities which serve the Elmira and Bath, New York, areas. It is franchised to supply gas service in all of the political subdivisions in which it operates. The Gas Company is under the jurisdiction of the New York Public Service Commission (“NYPSC”) which oversees and sets rates for New York gas distribution companies. In addition, the Gas Company has contracts with Corning Incorporated and Woodhull Municipal Gas Company, a small local utility, to provide maintenance service on their gas lines. Pike is an electric and gas utility regulated by the Pennsylvania Public Utility Commission (“PAPUC”). Pike provides electric service to approximately 4,~~800~~900 customers in the Townships of Westfall, Milford, ~~and~~ the northern part of Dingman, and in the Boroughs of Milford and Matamoras. Pike provides natural gas service to 1,~~200~~300 customers in Westfall Township and the Borough of Matamoras. All of these communities are located in Pike County, Pennsylvania. Additionally, Leatherstocking Gas is also regulated by the PAPUC and distributes gas in Susquehanna and Bradford Counties, Pennsylvania. Leatherstocking Pipeline, an unregulated company, ~~previously~~has served one customer in Lawton, Pennsylvania and has had no revenues since 2018. ~~Leatherstocking NY has an application pending before the NYPSC for authority to provide gas distribution services in Broome County, New York.~~

~~The~~On ~~information~~January ~~furnished~~12, ~~herewith~~2021, ~~reflects~~Holding ~~all~~Company ~~adjustments~~entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Holding Company, ACP Crotona Corp. (“Parent”), and ACP Crotona Merger Sub Corp. (“Merger Sub”), pursuant to which ~~are~~Merger Sub will merge with and into Holding Company, inand Holding Company will continue as the ~~opinion~~surviving corporation and a wholly owned subsidiary of ~~management~~Parent (the “Merger”). As a result of the Merger, ~~necessary~~shareholders of Holding Company will receive consideration for atheir ~~fair~~shares ~~presentation~~in the following amounts: (i) $24.75 in cash, per share of common stock (the ~~results~~“Merger Consideration”); (ii) $25 per share of Series A preferred stock; (iii) $29.70 per share of Series B preferred stock; and (iv) $25 per share of Series C preferred stock. Amounts payable to all shareholders will include cash for ~~the~~any ~~period~~unpaid dividends. ~~Certain~~Parent ~~information~~and Merger Sub are affiliates of Argo Infrastructure Partners LP (“Argo”) and ~~footnote~~were ~~disclosures~~formed ~~normally~~by ~~included~~Argo in ~~financial~~order ~~statements~~to ~~prepared~~complete inthe ~~accordance~~Merger. ~~with~~The ~~accounting~~Merger ~~principles~~is ~~generally~~subject ~~accepted~~to, inamong other customary closing conditions, the ~~United~~approvals ~~States~~of the NYPSC and the PAPUC. On February 3, the PAPUC approved the Merger. In addition, the Merger requires the approval of ~~America~~the ~~have~~Company’s ~~been~~shareholders, ~~condensed~~which oroccurred ~~omitted~~at ~~pursuant~~the toCompany’s ~~SEC~~annual ~~rules~~shareholders ~~and~~meeting ~~regulations~~in May of 2021, ~~although~~and the ~~Holding~~expiration of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act. The Merger Agreement also includes certain termination rights for both the Company ~~believes~~and Parent and provides that, in connection with the ~~disclosures~~termination ~~which~~of ~~are~~the ~~made~~Merger ~~are~~Agreement ~~adequate~~under specified circumstances, termination fees may be owed by the Company to ~~make~~Parent, depending on the ~~information~~circumstances ~~presented~~surrounding ~~not~~a ~~misleading~~termination.

OnThe ~~July~~Merger 1,Agreement ~~2020,~~provided ~~the~~for ~~Holding~~a ~~Company~~45-day ~~purchased~~“Go ~~the~~Shop” ~~remaining~~period ~~50%~~which ~~interest~~expired inon ~~Leatherstocking~~February ~~Gas~~26, ~~and~~2021. ~~Leatherstocking~~During ~~Pipeline (collectively,~~ the “~~Leatherstocking~~Go ~~Companies~~Shop”) period, ~~and items of income or loss and~~ the ~~balance~~Company ~~sheets~~received ofno ~~these~~competing ~~subsidiaries~~offers ~~are~~or ~~now~~alternative ~~included~~acquisition inproposals. ~~the~~The Company’s ~~consolidated~~is ~~financial~~now ~~statements.~~subject ~~For~~to ~~the~~a ~~first~~customary ~~nine~~“No ~~months~~Shop” ofprovision ~~fiscal~~that ~~2020,~~restricts the Company’s ~~accounted~~ability ~~for~~to ~~its~~solicit ~~investments~~acquisition inproposals ~~the~~from ~~Leatherstocking~~third ~~Companies~~parties ~~using~~and ~~the~~to ~~equity~~provide ~~method~~non-public ofinformation ~~accounting.~~and ~~Components~~to ofnegotiate ~~our~~with ~~financial~~third ~~statements~~parties ~~reflect~~regarding ~~these~~unsolicited ~~differences.~~acquisition ~~The~~proposals ~~following~~that ~~unaudited~~is ~~proforma~~reasonably ~~information~~expected ~~presents~~to ~~the~~lead ~~Company’s~~to ~~results~~a ofsuperior ~~operations~~proposal. asOn ifApril ~~the~~30, ~~Company~~2021, ~~owned 100% of~~ the ~~Leatherstocking~~Company ~~Companies~~and atArgo ~~the~~filed ~~beginning~~with of the ~~fiscal~~NYPSC ~~year~~and ~~ended~~PAPUC ~~September~~joint ~~30,~~petitions ~~2020.~~requesting ~~The~~approval ~~proforma~~to ~~results~~conclude dothe ~~not~~merger. ~~purport~~Decisions tofrom ~~represent what~~ the ~~Company’s~~commissions ~~results~~on ofthe ~~operations~~merger ~~actually~~petitions ~~would~~are ~~have~~not ~~been~~expected ifuntil the ~~transaction~~first ~~had~~half ~~occurred~~of at2022. ~~the~~The ~~beginning~~Merger ofwas ~~the~~voted ~~period~~on ~~presented~~and orapproved ~~what~~by the Company’s ~~results~~shareholders ofat ~~operations~~its ~~will~~annual beshareholder inmeeting ~~future~~on ~~periods~~May 27, 2021.

	Three months ended		Nine months ended
	June 30, 2020		June 30, 2020
Total Revenue	$	7,215,129	$	28,226,678
Net Income	$	491,629	$	3,676,518

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The consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Holding Company’s latest annual report on Form 10-K for the fiscal year ended September 30, 2020 (“Annual Report”), filed on December 21, 2020. These interim consolidated financial statements are unaudited.

Our significant accounting policies are described in the notes to the Consolidated Financial Statements in the Holding Company’s Annual Report. It is important to understand that the application of generally accepted accounting principles in the United States of America involves certain assumptions, judgments and estimates that affect reported amounts of assets, liabilities, revenues and expenses. Thus, the application of these principles can have varying results from company to company.

Because our business is highly seasonal in nature, sales for each quarter of the year vary and are not comparable. Sales vary depending on seasonal variations in temperature, although the Gas Company’s weather normalization and revenue decoupling clauses approved by the NYPSC serve to stabilize net revenue by insulating the Gas Company, to an extent, from the effects of unusual temperature variations and conservation. Certain larger customer classes are not covered by weather normalization or revenue decoupling and weather will impact revenue from these classes. Neither Pike nor Leatherstocking Gas have weather normalization or revenue decoupling clauses.

It is the Holding Company’s policy to reclassify amounts in the prior year financial statements to conform to the current year presentation.

On January 12, 2021, Holding Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Holding Company, ACP Crotona Corp. (“Parent”), and ACP Crotona Merger Sub Corp. (“Merger Sub”), pursuant to which Merger Sub will merge with and into Holding Company, and Holding Company will continue as the surviving corporation and a wholly owned subsidiary of Parent (the “Merger”). As a result of the Merger, shareholders of Holding Company will receive consideration for their shares in the following amounts: (i) $24.75 in cash, per share of common stock (the “Merger Consideration”); (ii) $25 per share of Series A preferred stock; (iii) $29.70 per share of Series B preferred stock; and (iv) $25 per share of Series C preferred stock. Amounts payable to all shareholders will include cash for any unpaid dividends. Parent and Merger Sub are affiliates of Argo Infrastructure Partners LP (“Argo”) and were formed by Argo in order to complete the Merger.

The Merger is subject to, among other customary closing conditions, the approvals of the NYPSC and the PAPUC. In addition, the Merger requires the approval of the Company’s shareholders and the expiration of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act. The Merger Agreement also includes certain termination rights for both the Company and Parent and provides that, in connection with the termination of the Merger Agreement under specified circumstances, termination fees may be owed by the Company to Parent, depending on the circumstances surrounding a termination.

The Merger Agreement provided for a 45-day “Go Shop” period which expired on February 26, 2021. During the “Go Shop” period, the Company received no competing offers or alternative acquisition proposals. The Company is now subject to a customary “No Shop” provision that restricts the Company’s ability to solicit acquisition proposals from third parties and to provide non-public information and to negotiate with third parties regarding unsolicited acquisition proposals that is reasonably expected to lead to a superior proposal. On April 30, 2021, the Company and Argo filed with the NYPSC and PAPUC joint petitions requesting approval to conclude the Merger. Decisions from the commissions on the merger petitions are not expected until late 2021 or the first half of 2022. The Merger was voted on and approved by the Company’s shareholders at its annual shareholder meeting on May 27, 2021.

In connection with the execution of the Merger Agreement, the Company has suspended its dividend reinvestment plan.

Upon consummation of the Merger, the Company’s common stock will be delisted from the OTCQX and deregistered under the Exchange Act as soon as practicable.

15The information furnished herewith reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to SEC rules and regulations, although the Holding Company believes the disclosures which are made are adequate to make the information presented not misleading.

~~Table~~The ofconsolidated ~~Contents~~financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Holding Company’s latest annual report on Form 10-K for the fiscal year ended September 30, 2021 (“Annual Report”), filed on December 17, 2021. These interim consolidated financial statements are unaudited.

Because our business is highly seasonal in nature, sales for each quarter of the year vary and are not comparable. Sales vary depending on seasonal variations in temperature, although the Gas Company’s weather normalization and revenue decoupling clauses approved by the NYPSC serve to stabilize net revenue, by insulating the Gas Company, to an extent, from the effects of unusual temperature variations and conservation. Certain larger customer classes are not covered by weather normalization or revenue decoupling and weather will impact revenue from these classes. Neither Pike nor Leatherstocking Gas have weather normalization or revenue decoupling clauses.

It is the Holding Company’s policy to reclassify amounts in the prior year financial statements to conform to the current year presentation.

New Accounting Pronouncements Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326), which provides a model, known as the current expected credit loss model, to estimate the expected lifetime credit loss on financial assets, including trade and other receivables, rather than incurred losses over the remaining life of most financial assets measured at amortized cost. The guidance also requires use of an allowance to record estimated credit losses on available-for-sale debt securities. The new standard is effective for annual and interim periods beginning after December 15, 2022. The Company is currently evaluating the impact of the guidance on their consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The new standard is effective for annual and interim periods beginning after December 15, 2021. The Company is currently evaluating the impact of the guidance on their consolidated financial statements and related disclosures.

Note 2 – Revenue From Contracts With Customers

The following tables present, for the three ~~and nine~~ months ended ~~June~~December 3031, 2021 and 2020 (“Q1 FY 2022” and “Q1 FY 2021”, respectively), revenue from contracts with customers as defined in Accounting Standards Codification (“ASC ~~606~~”) 606 (Revenue ~~From~~from Contracts ~~With~~with Customers), as well as additional revenue from sources other than contracts with customers, disaggregated by major source.

	For the three months ended June 30, 2021
	Revenues from		Other		Total utility
	contracts with		revenues		operating
	customers		(a)		revenues
Corning Gas:
Residential gas	$	3,148,680	$	182,727	$	3,331,407
Commercial gas		415,934		-		415,934
Transportation		981,138		40,040		1,021,178
Street lights gas		126		-		126
Wholesale		366,319		-		366,319
Local production		105,206		-		105,206
Total Corning Gas		5,017,403		222,767		5,240,170
Pike:
Residential gas		221,319		589		221,908
Commercial gas		75,892		-		75,892
Total Pike retail gas		297,211		589		297,800
Residential electric		846,232		6,776		853,008
Commercial electric		847,893		-		847,893
Electric – street lights		31,353		-		31,353
Total Pike retail electric		1,725,478		6,776		1,732,254
Total Pike		2,022,689		7,365		2,030,054
Leatherstocking Gas
Residential gas		70,479		-		70,479
Commercial gas		59,198		-		59,198
Industrial sales		85,039		-		85,039
Total Leatherstocking Companies		214,716		-		214,716
Total consolidated utility operating revenue	$	7,254,808	$	230,132	$	7,484,940

Table of Contents

	For the three months ended December 31, 2021
	Revenues from		Other		Total utility
	contracts with		revenues		operating
	customers		(a)		revenues
Corning Gas:
Residential gas	$	4,114,124	$	59,983	$	4,174,107
Commercial gas		607,543		-		607,543
Transportation		1,180,393		23,140		1,203,533
Street lights gas		136		-		136
Wholesale		704,200		-		704,200
Local production		69,065		-		69,065
Total Corning Gas	$	6,675,461	$	83,123	$	6,758,584

Pike:
Residential gas	$	454,488	$	4	$	454,492
Commercial gas		126,622		-		126,622
Total Pike retail gas		581,110		4		581,114

Residential electric		1,274,768		118,826		1,393,594
Commercial electric		1,331,176		-		1,331,176
Electric – street lights		40,853		-		40,853
Total Pike retail electric		2,646,797		118,826		2,765,623

Total Pike	$	3,227,907	$	118,830	$	3,346,737

Leatherstocking Gas
Residential gas	$	119,143	$	-	$	119,143
Commercial gas		115,993		-		115,993
Industrial sales		137,816		-		137,816

Total Leatherstocking Companies		372,952		-		372,952

Total consolidated utility operating revenue	$	10,276,320	$	201,953	$	10,478,273

(a) Other revenues include revenue from alternative revenue programs, such as revenue decoupling mechanisms under New York gas rate plans and weather normalization clauses. This also reflects reductions in revenues resulting from the deferral as regulatory liabilities of the net benefits of the federal Tax Cuts and Jobs Act of 2017. See “Regulatory Matters” in Note 9.

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For the nine months ended June 30, 2021

For the three months ended December 31, 2020

Revenues from

Other

Total utility

contracts with

revenues

operating

customers

(a)

revenues

Corning Gas:

Residential gas

123,~~957~~393,~~652~~723

~~473~~(113,~~321~~032

)

133,~~430~~280,~~973~~691

Commercial gas

1378,~~704,525~~967

Transportation

31,~~649~~127,~~932~~974

~~(68~~51,~~420~~428

)

31,~~581~~179,~~512~~402

Street lights gas

~~317~~93

Wholesale

1482,~~603,141~~869

Local production

~~459~~175,~~692~~605

Total Corning Gas

205,~~375~~559,~~259~~231

~~404~~(61,~~901~~604

)

205,~~780~~497,~~160~~627

Pike:

Residential gas

1413,~~330,250~~874

(25,~~281~~146

)

1408,~~327,969~~728

Commercial gas

~~371~~111,~~535~~450

Total Pike retail gas

1525,~~701,785~~324

(25,~~281~~146

)

1520,~~699,504~~178

Residential electric

2977,~~768,810~~919

60(1,~~259~~210

)

2976,~~829,069~~709

Commercial electric

2887,~~472,137~~934

Electric – street lights

9432,~~814~~606

Total Pike retail electric

51,~~335~~898,~~761~~459

60(1,~~259~~210

)

51,~~396~~897,~~020~~249

Total Pike

72,~~037~~423,~~546~~783

57(6,~~978~~356

)

72,~~095~~417,~~524~~427

Leatherstocking Gas

Residential gas

~~384~~138,~~813~~832

Commercial gas

~~343~~117,~~868~~028

Industrial sales

~~423~~148,~~012~~484

Total Leatherstocking Companies

1404,~~151,693~~344

Total consolidated utility operating revenue

288,~~564~~387,~~498~~358

~~462~~(67,~~879~~960

)

298,~~027~~319,~~377~~398

(a) Other revenues include revenue from alternative revenue programs, such as revenue decoupling mechanisms under New York gas rate plans and weather normalization clauses. Other revenues also includes reductions in revenues resulting from the deferral as regulatory liabilities of the net benefits of the federal Tax Cuts and Jobs Act of 2017. See “Regulatory Matters” in Note 9.

Table of Contents

	For the three months ended June 30, 2020
	Revenues from		Other			Total utility
	contracts with		revenues			operating
	customers		(a)			revenues
Corning Gas:
Residential gas	$	3,533,175	$	(189,420	)	$	3,343,755
Commercial gas		369,957		-			369,957
Transportation		937,403		102,086			1,039,489
Street lights gas		94		-			94
Wholesale		339,688		-			339,688
Local production		170,495		-			170,495
Total Corning Gas	$	5,350,812	$	(87,334	)	$	5,263,478
Pike:
Residential gas	$	219,939	$	(351	)	$	219,588
Commercial gas		57,230		-			57,230
Total Pike retail gas		277,169		(351	)		276,818
Residential electric		746,204		(8,335	)		737,869
Commercial electric		680,267		-			680,267
Electric – street lights		30,320		-			30,320
Total Pike retail electric		1,456,791		(8,335	)		1,448,456
Total Pike	$	1,733,960	$	(8,686	)	$	1,725,274
Total consolidated utility operating revenue	$	7,084,772	$	(96,020	)	$	6,988,752

(a) Other revenues include revenue from alternative revenue programs, such as revenue decoupling mechanisms and weather normalization provisions under a New York gas rate plan. This also reflects reductions in revenues resulting from the deferral as regulatory liabilities of the net benefits of the federal Tax Cuts and Jobs Act of 2017. See “Regulatory Matters” in Note 9.

	For the nine months ended June 30, 2020
	Revenues from		Other			Total utility
	contracts with		revenues			operating
	customers		(a)			revenues
Corning Gas:
Residential gas	$	13,280,227	$	(5,502	)	$	13,274,725
Commercial gas		1,922,877		-			1,922,877
Transportation		3,679,551		92,661			3,772,212
Street lights gas		301		-			301
Wholesale		1,506,837		-			1,506,837
Local production		533,743		-			533,743
Total Corning Gas	$	20,923,536	$	87,159		$	21,010,695
Pike:
Residential gas	$	1,047,829	$	1,290		$	1,049,119
Commercial gas		262,041		-			262,041
Total Pike retail gas		1,309,870		1,290			1,311,160
Residential electric		2,364,886		88,940			2,453,826
Commercial electric		2,228,534		-			2,228,534
Electric – street lights		91,913		-			91,913
Total Pike retail electric		4,685,333		88,940			4,774,273
Total Pike	$	5,995,203	$	90,230		$	6,085,433
Total consolidated utility operating revenue	$	26,918,739	$	177,389		$	27,096,128

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The Gas Company records revenues from residential and commercial customers based on meters read on a cyclical basis throughout each month, while certain large industrial and utility customers’ meters are read at the end of each month. Several meters are read at the end of each month to calculate local production revenues. The Gas Company does not accrue revenue for gas delivered but not yet billed, as the NYPSC requires that such accounting must be adopted during a rate proceeding, which the Gas Company has not done. The Gas Company, as part of its currently effective rate plan, has a weather normalization clause as protection against severe weather fluctuations. This affects ~~residential and small commercial~~ space heating customers and is activated when degree days are 2.2% greater or less than the 30-year average. As a result, the effect on revenue fluctuations of weather related gas sales is somewhat moderated.

Pike recognizes revenues for electric and gas service on a monthly billing cycle basis. Pike does not accrue for gas and electricity delivered. Pike does not have a weather normalization clause as protection against severe weather.

Leatherstocking Gas recognizes revenues for gas service on a monthly billing cycle basis. Leatherstocking Gas does not record unbilled revenues. Leatherstocking Gas does not have a weather normalization clause as protection against severe weather.

In addition to weather normalization, the Gas Company has implemented a revenue decoupling mechanism (RDM). The RDM reconciles actual delivery service revenues to allowed delivery service revenues (which are based on the annual customer and volume forecasts in the last rate case) for residential customers. The Gas Company will refund or surcharge customers for differences between actual and allowed revenues. The shortfall or excess after the annual reconciliation will be surcharged or refunded to customers over a twelve-month period starting September 1st each year. Pike and Leatherstocking Gas do not have a revenue decoupling mechanism as part of their rate structures.

Revenues are recorded as energy is delivered, generated, or services are provided and billed to customers. Amounts billed are recorded in customer accounts receivable, with payment generally due the following month.

Note 3 – Pension and Other Post-Retirement Benefit Plans

Components of Net Periodic Benefit Cost:

	Pension Benefits						Other Benefits
	Three Months Ended December 31,						Three Months Ended December 31,
	2021			2020			2021		2020
Service Cost	$	220,073		$	198,623		$	5,807	$	4,739
Interest Cost		241,251			240,959			8,012		6,973
Expected return on plan assets		(339,249	)		(361,414	)		-		-
Amortization of prior service cost		-			-			3,810		3,810
Amortization of net (gain) loss		174,863			244,156			993		421
Net periodic benefit cost	$	296,938		$	322,324		$	18,622	$	15,943

Pension Benefits
	Three Months Ended June 30,						Nine Months Ended June 30,
	2021			2020			2021			2020
Service Cost	$	198,623		$	186,111		$	595,868		$	558,333
Interest Cost		240,959			246,324			722,876			738,972
Expected return on plan assets		(361,414	)		(325,249	)		(1,084,243	)		(975,748	)
Amortization of net actuarial gain		244,156			224,321			732,469			672,965
Net periodic benefit cost	$	322,324		$	331,507		$	966,970		$	994,522

Other Benefits

	Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
Service Cost	$	4,739	$	4,633	$	14,218	$	13,900
Interest Cost		6,972		9,255		20,918		27,766
Amortization of prior service cost		3,810		3,494		11,429		10,484
Amortization of net actuarial gain		421		654		1,262		1,963
Net periodic benefit cost	$	15,942	$	18,036	$	47,827	$	54,113

Table of Contents

For ratemaking and financial statement purposes, pension expense represents the amount approved by the NYPSC in the Gas Company’s most recently approved rate case. Pension expense for ratemaking and financial statement purposes was $~~165~~235,~~071~~357 for ~~the~~Q1 ~~three~~FY ~~months~~2022 ~~ended June 30, 2021~~ and $~~218~~235,~~683~~357 for ~~the~~Q1 ~~three~~FY ~~months ended June 30, 2020. Pension expense for ratemaking and financial statement purposes was $507,496 for the nine months ended June 30,~~ 2021 ~~and $656,049 for the nine months ended June 30, 2020~~. Total pension costs are recorded in accordance with accounting prescribed by the NYPSC in 1993. The cumulative net difference between the pension expense for ratemaking and financial statement purposes, since 1993, has been deferred as a regulatory asset and amounted to $1550,~~540,956~~495 and $1,~~225~~358,~~004~~763 at ~~June~~December 3031, 2021 and December 31, 2020, respectively.

The NYPSC has allowed the Gas Company to recover incremental costs associated with other post-retirement benefits through rates on a current basis. Other post-retirement benefit expense (benefit) (OPEB) for ratemaking and financial statement purposes was $13,~~154~~175 for the ~~three~~Q1 ~~months~~FY ~~ended~~2022 ~~June 30, 2021~~ and $1413,~~680~~209 for the ~~three~~Q1 ~~months~~FY ~~ended June 30, 2020~~2021. ~~Other~~Total ~~post-retirement~~OPEB ~~benefit~~costs ~~expense~~are ~~for~~recorded ~~ratemaking~~in ~~and~~accordance ~~financial~~with ~~statement~~accounting ~~purposes~~prescribed ~~was~~by ~~$39,346 for~~ the ~~nine months ended June 30, 2021 and $44,040 for the nine months ended June 30, 2020~~NYPSC. The difference between the other post-retirement benefit expense (benefit) for ratemaking and financial statement purposes, and the amount computed above has been deferred as a regulatory ~~liability and amounted to $9,907 and $358,670 at June 30, 2021 and 2020, respectively~~asset.

The Gas Company will apply the provisions of the recently enacted American Rescue Plan Act of 2021 (“ARPA”) for purposes of funding its pension plan. ARPA allows a plan sponsor to apply more favorable interest rate assumptions for purposes of determining its required cash contributions, and it allows plan sponsors to fund a shortfall over 15 years, rather than over 7 years under prior law. Additionally, ARPA permits a plan sponsor to elect to redetermine its required contribution for 2020 under the provisions of ARPA, as if the law had been in effect for all of 2020. The Company has elected to apply ARPA to its 2020 plan year, resulting is a deemed credit in the amount of $450,000, that, when applied to its 2021 contribution requirement, reduces the required 2021 cash contribution to $260,000.Contributions

The Gas Company expects to contribute $~~692~~607,~~554~~211 to its Pension Plan during the fiscal year ending September 30, ~~2021~~2022. A total of $~~511~~296,~~266~~938 was paid to the Pension Plan during ~~the~~Q1 ~~nine~~FY ~~months~~2022 ~~ending June 30, 2021~~ and $~~0 during the three months ended June 30~~255,633 ~~2021. A total of $663,750~~ was paid to the Pension Plan during ~~the~~Q1 ~~nine~~FY ~~months ended June 30, 2020 and $288,652 during the three months ended June 30, 2020~~2021.

Note 4 – Financing Activities

On ~~August~~December 3117, ~~2020~~2021, Corning Gas ~~entered~~increased ~~into~~from a $38.~~718~~0 million ~~multiple disbursement term note with M&T Bank which permitted draws from time~~ to ~~time~~$8.5 tomillion ~~pay~~its ~~down~~revolving ~~$250,000~~line of ~~existing~~credit from M&T Bank. ~~debt~~Corning ~~and~~Gas ~~for~~will ~~capital~~use ~~expenditures in accordance with~~ its ~~terms~~increased ~~until~~line ~~October~~of ~~31,~~credit ~~2020~~for atworking ~~which~~capital ~~time amounts outstanding under the note totaling $3~~purposes.~~718~~ ~~million~~The ~~converted~~line ~~to a ten year term loan, payable in 119 equal monthly installments with an additional final installment~~ of ~~unpaid~~credit ~~principal~~bears ~~and~~ interest ~~due~~at ona ~~November~~variable ~~30,~~rate ~~2030.~~equal ~~Before converting~~ to (a) ~~term~~the ~~loan,~~applicable ~~borrowings~~daily onsimple ~~the~~secured ~~note~~overnight ~~had~~financing arate ~~variable~~(“SOFR”) ~~interest~~or ~~rate~~(b) ~~of 3.~~0.50% plus ~~the~~an ~~greater~~interest ofrate ~~one-month~~spread ~~LIBOR~~ranging orfrom 01.57%. ~~After~~to ~~October~~2.6% ~~31,~~depending ~~2020,~~on the ~~interest~~Company’s ~~rate~~funded ~~was~~debt ~~fixed~~to atleveraged 3EBITDA ratio.~~5%.~~ ~~This~~The ~~term~~line ~~note~~of credit is ~~subject~~due toand ~~the~~payable ~~terms~~upon ofdemand ~~the~~by ~~August 2020 Credit Agreement with~~ M&T Bank.

On October 135, ~~2020~~2021, ~~Pike’s~~Leatherstocking ~~multiple~~Gas ~~disbursement~~renegotiated two long term ~~note~~loans with ~~M&T~~Wayne Bank, ~~dated~~that ~~June~~were ~~24,~~issued ~~2020,~~in ~~was~~2019 ~~converted~~in ~~into~~the aamount ~~ten~~of ~~year~~$6 ~~term~~million ~~loan~~and $650,000 ~~payable~~respectively. inThe ~~119~~original ~~monthly~~loans ~~installments~~had ~~with~~a anfixed ~~additional~~interest ~~final~~rate ~~installment~~ of ~~unpaid~~4.75% ~~principal~~with ~~and~~an interest ~~due~~rate redetermination to occur on ~~November~~March 3011, ~~2030~~2014. The ~~note~~new isinterest inrate ~~the~~was ~~amount~~scheduled ofto $1be equal to 2.~~315~~25% ~~million~~in ~~and~~excess of the ~~interest~~5-year ~~rate~~Treasury ~~was~~Yield ~~fixed~~Curve ~~at 3~~Rate.~~5%.~~ ~~This~~The ~~term~~renegotiated ~~note~~loans ishave ~~subject~~a tofixed interest rate of 4.75% for the remaining terms of athe ~~credit~~loans. ~~agreement~~The ~~and~~principal ~~general~~balances ~~security~~of ~~agreement~~the ~~with~~loans ~~M&T~~on ~~Bank~~the ~~and~~date isof ~~guaranteed~~renegotiation bywere ~~the~~$4,751,146, and $501,565 respectively. The Holding Company guarantees these loans.

On ~~January~~December 1413, 2021, ~~Corning~~Leatherstocking Gas ~~borrowed~~converted ~~$850,000~~its ~~from~~multiple ~~M&T~~draw ~~Bank~~construction ~~for~~loan awith ~~three-month~~Wayne ~~period~~Bank ~~ending~~into ona ~~April~~ten ~~15,~~year ~~2021.~~term ~~The~~ loan ~~was used primarily to pay for transaction costs incurred~~ in ~~connection~~the ~~with~~amount ~~our~~of ~~planned merger with Argo (see Note 1)~~$800,000, ~~and~~at toa ~~pay~~fixed ~~pension and other operating expenses. The note bears an~~ interest rate of 24.675% ~~plus the one-month LIBOR rate with a floor of 3~~.~~1%.~~ ~~This~~The note ~~was~~matures ~~repaid in full from the proceeds of the Company’s construction loan with M&T Bank that was signed~~ on ~~June~~December 2513, ~~2021~~2031.

2015

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~~The~~On ~~Company~~June 25, ~~in the second quarter of fiscal~~ 2021, ~~applied~~Corning ~~for,~~Gas ~~and~~entered ~~received~~into ~~forgiveness~~a ~~of its Leatherstocking Payroll Protection Program (“PPP”) loan of~~ $~~65,491~~4.665 Onmillion ~~April~~multiple ~~15,~~disbursement ~~2021,~~term ~~the~~note ~~Company~~with ~~received~~M&T ~~forgiveness~~Bank ofto ~~its~~retire ~~Pike PPP loan of~~ $~~137~~850,~~200.~~000 Onof ~~May~~existing ~~21,~~short ~~2021,~~term ~~Corning~~debt ~~Gas~~and ~~Company’s~~which ~~PPP~~permitted ~~loan~~draws infrom ~~the~~time ~~amount~~to oftime ~~$970,900~~for ~~was~~capital ~~forgiven~~expenditures byin ~~the~~accordance ~~U.S.~~with ~~Small~~its ~~Business~~terms ~~Administration.~~until ~~The~~October ~~forgiven PPP loans constitute non-cash financing activities. On March 18~~31, 2021, ~~the~~at ~~NYPSC~~which ~~issued~~time anamounts ~~order~~outstanding ~~requesting~~under ~~information designed to determine~~ the ~~proper~~note ~~disposition~~converted ~~of the PPP loan proceeds. This order was issued prior~~ to ~~the~~a ~~date~~ten ~~that~~year ~~the~~term ~~PPP~~ loan ~~was forgiven. On May 13~~, ~~2021,~~with the ~~Company~~final ~~responded~~installment toof ~~the~~unpaid ~~order~~principal byand ~~supporting~~interest ~~its~~due ~~position~~on ~~that~~October it31, ~~was~~2031. ~~not~~Interest ~~obligated~~on ~~to refund~~ the ~~forgiven~~note ~~amount~~is ~~because~~a ~~during~~variable ~~the~~rate ~~pandemic,~~of ~~the~~2.9% ~~Company~~plus ~~also lost commercial revenues caused by~~ the ~~pandemic,~~one-month ~~incurred~~LIBOR ~~COVID related operating costs, and experienced increased customer uncollectible accounts~~rate. ~~The NYPSC has not responded to the Company’s submission~~. In ~~the~~connection ~~third~~with ~~quarter of fiscal 2021,~~ the ~~Company recorded debt forgiveness income in the amount of $970~~loan,~~900~~ inCorning ~~its~~Gas ~~consolidated~~entered ~~statements~~into ~~of income. Also in the third quarter of fiscal 2021, the Company recorded~~ a ~~regulatory~~fifth ~~liability~~amended ofreplacement ~~approximately $490,000, which is the difference between the forgiven amount~~ and ~~the~~restated ~~Company’s~~credit ~~estimate~~agreement ofwith ~~lost~~M&T ~~revenues, COVID related operating costs and increased customer uncollectible accounts~~Bank. ~~Income from PPP loan forgiveness for all three loans is included in Other income (expense) in the consolidated statements of income.~~

InOn ~~March~~August of19, 2021, ~~the~~Pike ~~Company~~entered ~~applied~~into ~~for~~ a $12.21 million multiple disbursement term loan with M&T Bank for capital expenditures and pipeline repairs which permitted draws from ~~the~~time ~~U.S.~~to ~~Department~~time ofuntil ~~Agriculture~~October 31, 2021, at which time amounts outstanding under the ~~Rural~~loan ~~Energy~~converted ~~Services~~to ~~Program~~a ~~(RESP).~~ten-year ~~The~~term, ~~RESP~~loan ~~program~~with isthe ~~designed~~final toinstallment ~~provide~~of ~~low~~unpaid ~~cost~~principal ~~loans~~and tointerest ~~rural~~due ~~customers~~on ~~who~~October ~~will~~31, ~~use~~2031. ~~borrowed~~The ~~funds~~Note bears interest at a variable rate equal to ~~purchase~~2.9% ~~energy~~plus ~~efficient~~the ~~gas~~one-month ~~furnaces,~~LIBOR ~~hot~~rate. ~~water~~In ~~heaters~~connection with the Loan, Pike entered into a fifth amended replacement and ~~gas~~restated ~~services~~credit agreement with M&T Bank (the “Credit Agreement”). The ~~loan~~Credit Agreement contains various affirmative and negative covenants including, ifamong ~~approved~~others: by(i) ~~the~~Pike ~~Department~~must maintain a “Total Funded Debt to Tangible Net Worth” ratio of ~~Agriculture~~not greater than 1.40 to 1.0, ~~would~~a be“Total ~~interest~~Funded ~~free~~Debt to ~~the~~EBITDA” ~~Company~~ratio of not greater than 3.75 to 1.0, and ~~must~~a beminimum ~~repaid~~“Minimum ~~over~~Debt aService ~~period~~Coverage Ratio” of not toless ~~exceed~~than 201.10 ~~years~~to 1.0, ~~Customers~~in ~~who~~each ~~borrow~~case ~~funds~~measured ~~from~~quarterly ~~Corning~~based ~~Gas~~on ~~would~~Pike’s ~~pay~~trailing atwelve ~~nominal~~month ~~rate~~operating ofperformance; ~~interest~~(ii) Pike must deliver to ~~the~~M&T ~~Company~~Bank quarterly and annual financial statements, ~~which~~compliance ~~funds~~and ~~will~~other bedocuments; ~~used~~and to(iii) ~~administer~~Pike may not sell all or substantially all of its assets, acquire substantially all of the ~~program.~~asset ~~Customer~~of ~~loans~~any ~~must~~other beentity, ~~repaid~~do ~~over~~business aunder ~~period~~any ~~not~~assumed toname, ~~exceed~~materially 10change ~~years.~~its ~~The~~business, ~~Company’s~~purposes, ~~loan~~structure ~~application~~or isoperations ~~pending~~which ~~approval~~could ~~with~~materially ~~the~~adversely ~~U.S.~~affect ~~Department~~Pike, ofor ~~Agriculture~~engage in any merger, consolidation or other similar transaction.

OnWe ~~June~~are 25, 2021, Corning Gas entered into a $4.665 million multiple disbursement term note with M&T Bank to retire $850,000 of existing short term debt and which permits draws from time to time for capital expenditures in ~~accordance~~compliance with ~~its~~our ~~terms~~financial ~~until~~covenant ~~October~~calculations ~~31,~~as ~~2021 at which time amounts outstanding under the note will convert to a ten year term loan, with the final installment~~ of ~~unpaid~~December ~~principal and interest due on October~~ 31, 2031. Before converting to a term loan, borrowings on the note have a variable interest rate of 2.9% plus one-month LIBOR with a floor of 3.4%. At the loan conversion date, the Company will have the option to elect a fixed or floating interest rate. This term note is subject to the terms of the August 2020 Credit Agreement with M&T Bank. The balance owed on this loan at June 30, 2021 ~~was $2,412,978~~.

On June 25, 2021, Corning Gas obtained a $1.9 million bridge loan (the “Bridge Loan”) from M&T Bank. Corning Gas will use the Bridge Loan for short-term general operating purposes. To evidence the Bridge Loan, Corning Gas issued a LIBOR demand note to M&T Bank in the principal amount of $1.9 million (the “Bridge Note”). The Bridge Note bears interest at a variable rate equal to 3.0% plus the one-month LIBOR rate, with a floor of 3.5%. Interest on the Bridge Note is payable monthly. The balance owed on this loan at June 30, 2021 was $1.9 million.

The Company is currently negotiating a multiple disbursement term loan with M&T Bank for Pike construction projects. The loan is expected to be in the amount of $2.2 million, and its terms will mirror the Corning Gas loan of June 25, 2021, described above. This loan, however, will be guaranteed by the Holding Company. The Company expects to conclude this loan during the third week of August 2021.

We are in compliance with our financial covenant calculations as of June 30, 2021.

Note 5 – Fair Value of Financial Instruments

The Holding Company has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. Level 1 uses observable inputs such as quoted prices in active markets; Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Holding Company to develop its own assumptions. The carrying amount of debt on the Consolidated Balance Sheets approximates fair value as a result of instruments bearing interest rates that approximate current market rates for similar instruments, and the carrying amounts for cash, accounts receivable and accounts payable approximate fair value due to their short-term nature. Investment assets, which fund the Holding Company’s deferred compensation plan, are valued based on Level 1 inputs.

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The Holding Company has determined the fair value of certain assets through application of FASB ASC 820 “Fair Value Measurements and Disclosures”.

Fair value of assets and liabilities measured on a recurring basis at ~~June~~December 3031, 2021 and September 30, ~~2020~~2021 are as follows:

Fair Value Measurements at Reporting Date Using:

Fair Value

Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1)

Level 2

Level 3

June 30, 2021

December 31, 2021

Available-for-sale securities

2,~~358~~445,~~116~~654

September 30, 2020

September 30, 2021

Available-for-sale securities

2,~~193~~337,~~112~~330

A summary of the marketable securities at ~~June~~December 3031, 2021 and September 30, ~~2020~~2021 is as follows:

	Cost Basis		Unrealized Gain		Unrealized Loss		Market Value
June 30, 2021
December 31, 2021
Cash and equivalents	$	~~125~~479,~~806~~083	$	-	$	-	$	~~125~~479,~~806~~083
Metlife stock value		5351,~~855~~359		-1,032		-		5352,~~855~~391
Government and agency bonds		15,~~075~~069		1,~~402~~031		-		16,~~477~~100
Holding Company Preferred A Stock		197,875		~~418~~400,~~309~~207		-		~~616~~598,~~184~~082
Equity/Debt securities		1,110,129		402,704		-		1,512,833
Equity securities		810,099		438,782		-		1,248,881
Commodities		3350,~~420~~346		-771		~~459~~-		3251,~~961~~117
Total securities	$	1,~~536~~603,~~160~~831	$	~~822~~841,~~415~~823	$	~~459~~-	$	2,~~358~~445,~~116~~654
September 30, 2020
September 30, 2021
Cash and equivalents	$	~~120~~148,~~559~~327	$	-	$	-	$	~~120~~148,~~559~~327
Metlife stock value		3053,~~701~~855		-		-2,496		3051,~~701~~359
Government and agency bonds		~~143~~15,~~960~~072		91,~~312~~243		-		~~153~~16,~~272~~315
Corporate bonds		143,196		3,951		-		147,147
Holding Company Preferred A Stock		197,875		400,207		-		598,082
Mutual funds		42,664		2,414		-		45,078
Equity securities		1,122,826		367,741		-		1,490,567
Holding Company Preferred A Stock		572,875		45,830		-		618,705
Commodities		33,420		-		740		32,680
Equity securities		788,793		265,654		-		1,054,447
Total securities	$	1,571,375	$	769,191	$	3,236	$	2,337,330
Commodities		21,881		1,322		-		23,203
Total securities	$	1,864,629	$	328,483	$	-	$	2,193,112

Realized gains included in earnings for the periods reported in investment income are as follows:

Investment Income
	Three Months Ended June 30,				Nine Months Ended June 30,
	Three Months Ended December 31,
	2021		2020		~~2021~~		~~2020~~
Net realized gains and (losses) recognized during the period on investments	$	23,170	$	13,208	$	198,392	$	(9,344	)
Net realized gains recognized during the period on investments	$	21,764	$	26,464

Unrealized ~~(losses)/~~gains on equity securities included in investment income for ~~the~~Q1 ~~three~~FY 2022 and ~~nine months ended June 30,~~ 2021 were ($5872,~~660)~~152 and $~~138~~114,~~826~~258, respectively. ~~Unrealized gains on equity securities included in investment income for the three and nine months ended June 30, 2020 were $160,051 and $73,996, respectively.~~

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Financial assets and liabilities valued using level 1 inputs are based on unadjusted quoted market prices as of the close of business on the days noted within active markets.

Note 6 – Stockholders’ Equity and Preferred Stock

Shares issued during the three ~~and nine~~ months ended ~~June~~December 3031, 2021 and 2020 were for the following:

	Three months ended June 30, 2021				Nine months ended June 30, 2021
	Q1 FY 2022				Q1 FY 2021
	Shares		Amount		Shares		Amount
Dividend reinvestment program (DRIP)		-	$	-		3,380	$	51,749
Directors		-		-		3,150		40,163
Officers		-		-		4,500		345,~~984~~117
Total		-	$	-		11,030	$	~~126~~97,~~896~~029

	Three months ended June 30, 2020				Nine months ended June 30, 2020
	Shares		Amount		Shares		Amount
Dividend reinvestment program (DRIP)		3,570	$	50,244		8,989	$	151,011
Directors		3,150		36,619		9,450		127,469
Leatherstocking Gas Company		150		2,327		450		8,120
Total		6,870	$	89,190		18,889	$	286,600

For the three months ended September 30, 2021, dividends were paid on October 15, 2021 to stockholders of record on September 30, 2021 in the amount of $469,898. For Q1 FY 2022, $469,898 was accrued for dividends paid on January 14, 2022 to stockholders of record on December 31, 2021.

~~Shares~~ ~~issued~~There towas ~~Leatherstocking~~no ~~Gas~~stock ~~were~~option ~~used~~activity toduring ~~compensate~~Q1 ~~its~~FY ~~independent~~2022. ~~director,~~The ~~Carl~~following ~~Hayden~~table details options outstanding as of December 31, 2021.

For the three months ended September 30, 2020, dividends were paid on October 15, 2020 to stockholders of record on September 30, 2020 in the amount of $468,235, less DRIP shares valued at $51,749. As of June 30, 2021, $469,898 was accrued for dividends paid on July 15, 2021 to stockholders of record on June 30, 2021.

					Weighted
			Weighted		Average
	Number of		Average		Remaining Life
	Options		Exercise Price		(years)
Outstanding at September 30, 2021		20,000	$	19.75		9.45
Granted		-		-		-
Exercised		-		-		-
Expired or forfeited		-		-		-
Outstanding at December 31, 2021		20,000	$	19.75		9.19

Series A Cumulative Preferred Stock ~~options~~accrues ~~outstanding~~cumulative asdividends at a rate of ~~June~~6.0% ~~30,~~of ~~2021~~the ~~were~~liquidation ~~issued~~preference inper ~~August~~share ~~2020~~($25.00) ~~There~~and ~~was~~are noexpected ~~stock~~to ~~option~~be ~~activity~~paid ~~during~~on ~~the~~or ~~three~~about orthe ~~nine~~14th ~~months~~day ~~ended~~of ~~June~~April, 30July, ~~2021~~October and ~~there~~January of each year. The dividends for Q1 FY 2022 and 2021 were no$97,725 ~~outstanding~~and ~~stock~~$97,725, ~~options~~respectively, orand ~~stock~~these ~~option~~are ~~activity~~recorded ~~during~~as interest expense. The amortization of the ~~three~~Series orA ~~nine~~Preferred ~~months~~Stock ~~ended~~debt ~~June~~issuance 30costs was $2,537 ~~2020~~in Q1 FY 2022 and $2,538 in Q1 FY 2021.

					Weighted
			Weighted		Average
	Number of		Average		Remaining Life
	Options		Exercise Price		(years)
Outstanding at September 30, 2020		10,000	$	16.50		9.92
Granted		-		-		-
Exercised		-		-		-
Expired or Forfeited		-		-		-
Outstanding at June 30, 2021		10,000	$	16.50		9.16

Series A Cumulative Preferred Stock accrues cumulative dividends at a rate of 6.0% of the liquidation preference per share ($25.00) and are expected to be paid on or about the 14th day of April, July, October and January of each year. The dividends for the three months ended June 30, 2021 and 2020 were $97,725 and $78,975, respectively. The dividends for the nine months ended June 30, 2021 and 2020 were $293,175 and $236,925, respectively. These dividends are recorded as interest expense. The amortization of the Series A Preferred Stock debt issuance costs for the nine months ended June 30, 2021 and 2020 was $7,614 and $15,548, respectively. The amortization of the Series A Preferred Stock debt issuance costs for the three months ended June 30, 2021 and 2020 was $2,538 and $5,183, respectively.

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Series B Convertible Preferred Stock accrues cumulative dividends at a rate of 4.8% of the liquidation preference per share ($20.75) and are expected to be paid on or about the 14th day of April, July, October and January of each year and began October 14, 2016. At September 30, ~~2020~~2021 there was $61,066 accrued for Series B dividends paid on October 15, ~~2020~~2021. AsFor ofQ1 ~~June~~FY 302022, ~~2021,~~ $61,~~065~~066 was accrued for dividends paid on ~~July~~January 1514, ~~2021~~2022.

Series C Cumulative Preferred Stock accrues cumulative dividends at a rate of 6.0% of the liquidation preference per share ($25.00) and are expected to be paid on or about the 14th day of April, July, October and January of each year. The dividends for ~~the~~Q1 ~~three~~FY ~~months~~2022 ~~ended~~and ~~June 30,~~ 2021 ~~and 2020~~ were $67,500 and $7467,~~250~~500, respectively~~. The dividends for the nine months ended June 30~~, ~~2021~~ and ~~2020~~these ~~were $202,500 and $74,250, respectively. These dividends~~ are recorded as interest expense. The amortization of the Series C Preferred Stock debt issuance costs ~~for the nine months ended June 30, 2021 and 2020~~ was $~~186~~62 ~~and~~in ~~$-,~~Q1 ~~respectively.~~FY ~~The~~2022 ~~amortization of the Series C Preferred Stock debt issuance costs for the three months ended June 30, 2021~~ and ~~2020 was~~ $62 ~~and~~in ~~$0,~~Q1 ~~respectively~~FY 2021.

On December 3, 2021, the Holding Company amended its certificate of incorporation (“Certificate of Amendment”) to authorize the issuance of 5,000 shares of 1.5% Series D Cumulative redeemable Preferred Stock ,par value of $0.01 per share (“Series D Preferred Stock”). The Certificate of Amendment provides for certain redemption requirements and rights. On December 8, 2026, Holding 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, whether or not declared.

Upon the earlier to occur of (i) the termination of the Company’s merger agreement with Argo, and December 31, 2022, for one year thereafter, any holder of Series D Preferred Stock may elect to require the Holding Company to redeem all of the Series D Preferred Shares held by that holder for an amount equal to $1,000 per share, plus an amount equal to all accrued but unpaid dividends, if any, whether or not declared.

On December 8, 2021, Holding Company issued 5,000 shares of its newly authorized Series D Preferred Stock to ACP Crotona Corp., for $1,000 per share, or $5 million. For Q1 FY 2022, $4,891 was accrued for dividends paid on January 15, 2022. As previously disclosed, on January 12, 2021, the Company entered into an agreement and plan or merger by and among the Company and, among others, ACP Crotona Corp., an Argo affiliate.

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 used the funds to pay down short term borrowings at Corning Gas and at Leatherstocking Gas.

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.

Basic earnings (loss) per share are computed by dividing income (loss) available for common stock (net income less dividends declared on Series B Preferred Stock) by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

293,116 shares of common stock issuable upon conversion of Series B Convertible Preferred Stock were excluded from the calculation of diluted earnings per share for Q1 FY 2022 and Q1 FY 2021 because their inclusion would have been anti-dilutive. For Q1 FY 2022, the ~~three~~impact ~~months~~of ~~ended~~20,000 ~~June~~stock 30options outstanding was determined to be 3,738 incremental shares. For Q1 FY 2021, ~~and~~the ~~2020~~impact of 10,000 stock options outstanding were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

Note 7 – Investment in Joint ~~Ventures~~Venture

The Holding Company had an interest in Leatherstocking Gas and Leatherstocking Pipeline, each of which was a joint venture with Mirabito Regulated Industries, LLC (“Mirabito”), accounted for by the equity method. On July 1, 2020, Leatherstocking Gas distributed to its members franchises, engineering and gas pipeline assets located in New York having a book value of $0.532~~,000~~ million. These assets were then contributed to the equity of Leatherstocking Gas Company of New York, Inc. (“Leatherstocking NY”). The Company ~~owns~~owned 50% of the common shares of the newly formed Leatherstocking NY and ~~accounts~~accounted for this investment using the equity method of accounting. Mirabito ~~has~~had the option to acquire the Company’s interests in Leatherstocking NY, for a purchase price of $100,000, beginning on the earlier of a change in control of the Company, or July 1, 2021, and ending on June 30, 2023. IfOn ~~this~~October 5, 2021, Mirabito notified the Company that it exercised its option ~~remains~~to ~~unexercised~~acquire the Company’s interest in Leatherstocking NY, and on ~~June~~December 3031, ~~2023~~2021, the Company ~~has~~completed the ~~option~~sale of Leatherstocking NY for ~~sixty~~the ~~days~~$100,000 tooption ~~acquire~~price, plus Mirabito’s ~~shares~~share ~~for~~of accounts payable. The Company recorded a ~~purchase~~pre-tax ~~price~~loss of $~~100~~164,~~000.~~003 ~~This~~on ~~option~~the ~~has~~sale ~~not been exercised~~transaction.

The following table represents the Holding Company’s investment activity in the Leatherstocking joint ventures for the ~~nine~~three months ended ~~June~~December 3031, 2021 and 2020:

	2021			2020
Beginning balance in investment in joint ventures	$	~~264~~261,~~640~~180		$	2264,~~597,919~~640
Cost adjustment		(808	)		-
Proceeds from sale of interest in joint ventures		(100,000	)		-
Loss from joint ventures		(2,491	)		(50,442	)
Loss on sales of interest in joint ventures		(164,003	)		-
Ending balance in joint ventures	$	261,341		$	2,547,477
Accounts payable due		2,823			-
Loss associated with joint ventures		-			(1,701	)
Ending balance in joint ventures	$	-		$	262,939

As of and for the ~~nine~~three months ended ~~June~~December 3031, 2021 and 2020, the ~~Joint~~joint ~~Ventures~~ventures financial summary is as follows:

	2021			2020
Total assets	$	~~528,000~~-		$	12524,~~066,000~~579
Total liabilities	$	~~5,000~~-		$	~~6,971,000~~315
Net (loss) income	$	(5,000	)	$	101,000
Net income (loss)		-		$	(3,400	)

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Note 8 – Income Taxes

Income tax ~~(benefit)~~ expense for the periods ended ~~June~~December 3031, 2021, and December 31, 2020, are as follows:

Three Months Ended

~~Nine Months Ended~~

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

December 31, 2021

December 31, 2020

Current

Deferred

~~(461~~252,~~187~~310

)

(7155,~~645~~687

)

~~682,918~~

~~1,158,045~~

Total

~~( 461~~252,~~187~~310

)

(7155,~~645~~687

)

~~682,918~~

~~1,158,045~~

Actual income tax expense for ~~the~~Q1 ~~three~~FY 2022 and ~~nine~~Q1 ~~months~~FY ~~ended June 30,~~ 2021 ~~and 2020~~ is ~~significantly~~greater ~~lower~~ than tax calculated at the statutory rate (21%) due to ~~tax free PPP loan forgiveness income at Corning Natural Gas, Pike, and at Leatherstocking (nine months ended June 30, 2021 only) offset by~~ state income taxes and non-tax deductible dividends on Class A, Class C, and in FY 2022, Class CD preferred stock that are recorded as interest expense and included in pre-tax income.

In July of 2021, the Company filed its federal and state income tax returns for fiscal 2020. The Company expects to receive a Pennsylvania state tax refund of prior year estimated tax payments of approximately $99,000. The refund has no impact on earnings.

Note 9 – Regulatory Matters

OnHolding ~~February~~Company 27, 2020, Corning Gas filed with the NYPSC for increases in revenues of $6,255,926, $845,142, and $680,913 for the years ending January 31, 2022, 2023, and 2024, respectively (Case 20-G-0101). These standalone rate year increases would impact customer bills by 23.4%, 2.56%, and 2.01%, respectively. The base period (test year) for this filing is the 12-month period ended September 30, 2019. The levelized amount would be $3,523,167 in each of the years ending January 31, 2022, 2023 and 2024. The levelized increases would impact customer bills by 10.93% per year. We have requested a levelized approach.

The ~~filing~~Holding ~~with~~Company’s ~~the~~primary ~~NYPSC reflects a return on equity of 10.2% and pro-forma equity ratios of 50.67%~~business, ~~52.95%~~through ~~and~~its ~~55.26%~~subsidiaries ~~for~~Corning ~~the 12-month periods ending January 31~~Gas, ~~2022~~Pike, ~~2023,~~ and ~~2024~~Leatherstocking Gas, ~~respectively.~~is ~~The~~regulated ~~primary~~by ~~reasons for~~ the ~~rate increase are~~ NYPSC ~~mandated initiatives, including replacement of distribution pipe,~~ and ~~new safety~~PAPUC, ~~training,~~among and cyber security requirements; and shorter depreciation lives for gas pipeline infrastructure to reflect recent state decarbonization legislation. These two items comprise approximately 50% of the rate case increase request. The balance of the request is to recover increases in health insurance, wages and other ~~inflationary costs~~agencies.

On ~~June~~April 2630, ~~2020~~2021, the ~~New~~Company ~~York~~and ~~Department~~Argo ~~of Public Service Staff (“Staff”)~~ filed ~~its~~with ~~direct~~the ~~testimony~~NYPSC ~~in Case 20-G-0101. Staff recommended~~ a ~~one~~Verified ~~year~~Joint ~~revenue~~Petition ~~requirement~~seeking ~~of $517~~approval,~~063,~~ ~~compared~~pursuant to ~~the~~Section ~~Gas~~70 ~~Company’s request~~ of ~~$6,223,603. The primary differences between Staff and~~ the ~~Gas~~New ~~Company’s~~York ~~revenue~~Public ~~requirements~~Service isLaw ~~Staff’s~~for ~~equity~~its ~~return recommendation of 8~~merger.~~45%~~ ~~vs.~~This ~~10.20%,~~case ~~disallowance~~is ofpending ~~the~~approval ~~Gas~~by ~~Company’s request for shorter depreciation lives, difference in health insurance cost escalators, extension of~~ the ~~recovery~~Commission ~~period of regulatory costs from three years to five years,~~ and ~~disallowance~~there ofis ~~leak~~no ~~repair~~statutory ~~amortization.~~timeline ~~The~~for ~~Gas Company disagrees with Staff’s proposals. In November of 2020,~~ the parties requested that the Administrative Law Judges grant a four-month extension of time until May 31, 2021 to rule on the filing, with new rates being retroactively enacted as of February 1, 2021. The NYPSC ~~approved the extension of the suspend period on January 22, 2021. In March of 2021, the parties~~ to decide this ~~case could not reach a settlement and the case proceeded to a hearing before two administrative law judges~~matter.

25Also on April 30, 2021, the Company and Argo filed with the PAPUC a Joint Application requesting certificates of public convenience from the PAPUC and seeking all other PAPUC approvals necessary for the merger. On December 20, 2021, the administrative law judge assigned to the merger case approved a settlement reached by the Company and all intervenors in this case. The PAPUC approved the merger on February 3, 2022.

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~~On May 19, 2021, the NYPSC issued a rate order in this case establishing rates and a rate plan for the~~ Gas Company for a one-year period ending January 31, 2022 (“Rate Year”). The rate order disallowed the Company’s request for an increase in required revenue, and instead ordered a reduction of $766,000 from current rates. In the current rate order, the existing $1.3 million tax sur-credit (an adjustment to rates to refund to customers an amount owing them due to income tax rate reductions in the 2017 Tax Cuts and Jobs Act) expired, along with a $30,000 reduction to the annual Delivery Rate Adjustment. The net impact on the Gas Company’s customers was an increase of $505,000 for the Rate Year, retroactive to February 1, 2021. The NYPSC’s order also denied the Gas Company’s Deferral Petition that sought recovery of costs for a leak survey and a large number of repairs incurred as a safety measure in response to certain extraordinary winter conditions in 2015 of the type that cause damage to gas distribution systems. The Gas Company in the third quarter of 2021 recorded a reserve in the amount of $170,000 against its regulatory asset of approximately $340,000 for these costs. The Gas Company believes that these costs, net of the reserve, will be recoverable in rates as a result of it appeal of the NYPSC’s decision in its 2020 rate case. The NYPSC also refused to permit an increase in depreciation expense to account for the need to shorten its natural gas facilities service lives to reflect the Climate Leadership and Community Protection Act(“CLCPA”) mandates that will virtually eliminate fossil fuel use and the need for natural gas facilities in New York State by the year 2050. The Gas Company is appealing the NYPSC’s decisions in this case and has filed a new rate case. (See Note 11 - “Subsequent Events”).

InOn ~~March~~May of19, 2021, the NYPSC issued a ~~“Show~~rate ~~Cause”~~ order ~~instructing~~in ~~Corning~~Case 20-G-0101, establishing rates and a rate plan for the Gas toCompany ~~show~~for ~~cause~~a ~~why~~one-year ~~its~~period ~~PPP~~ending ~~loan~~on inJanuary 31,2022 (“Rate Year”). The rate order disallowed the ~~amount~~Company’s request for an increase in required revenue of $~~970~~6,~~900~~223,603, ~~should~~and ~~not~~instead beordered ~~refunded~~a toreduction ~~its~~of ~~customers~~$766,000 iffrom ~~and~~current ~~when~~rates. In the ~~loan~~current israte ~~forgiven~~order, the existing $1.3 ~~The~~million ~~Company~~tax ~~requested,~~sur-credit ~~and~~(an ~~the~~adjustment ~~NYPSC~~to ~~granted,~~rates to refund to customers an ~~extension~~amount ofowing ~~time~~them ~~until~~due ~~May~~to 19income tax rate reductions in the 2017 Tax Cuts and Jobs Act) expired, ~~2021~~along towith ~~file~~a ~~its~~$30,000 ~~response~~reduction to the ~~“Show~~annual ~~Cause”~~Delivery ~~order~~Rate Adjustment. OnIn ~~May 13~~addition, ~~2021,~~the NYPSC denied recovery of the Gas Company’s ~~responded~~approximately to$350,000 ~~the~~leak ~~“Show~~repair ~~Cause”~~and ~~order~~survey ~~supporting~~cost ~~its~~reserve ~~position~~established ~~that~~in itFY ~~will~~2016. ~~use~~The ~~PPP~~denial ~~loan~~of ~~proceeds~~recovery toof ~~fund~~this ~~COVID~~reserve ~~operating~~resulted ~~costs,~~in ~~lost~~a ~~commercial~~FY ~~revenues~~2021 charge of approximately $180,000 ~~and~~(pre-tax), ~~customer~~as ~~bad~~the ~~debt~~Company ~~increases~~had ~~(See~~previously ~~Note~~established 4a –reserve ~~Financing~~for ~~Activities~~this matter in the amount of $170,000 (pre-tax). OnThe ~~May~~net ~~21,~~impact ~~2021,~~on the ~~Corning~~ Gas ~~PPP~~Company’s ~~loan~~customers was ~~forgiven~~an increase of $505,000 for the Rate Year, retroactive to February 1, 2021.

ByThe Gas Company, on July 15, 2021, filed a petition ~~dated~~with ~~September~~the 3State of New York Supreme Court in Albany County pursuant to Article 78 of the Civil Practice Law and Rules to review and set aside the NYPSC May 19, ~~2020~~2021 order that was issued in ~~Case~~PSC cases 20-G-~~0442,~~0101 ~~Corning~~and ~~Gas~~16-G-0204 ~~requested~~involving ~~authority~~the ~~under~~Gas ~~Public~~Company’s ~~Service~~rates ~~Law~~for ~~Sec~~gas service. 69The toGas ~~issue~~Company’s ~~approximately~~petition ~~$29.5~~claims ~~million~~that the NYPSC’s decision was arbitrary and capricious and an abuse of ~~long~~discretion, ~~term~~affected ~~debt~~by ~~through~~errors ~~December~~of 31law, ~~2024~~and in violation of established regulatory procedure. The ~~proceeds~~Gas ~~are~~Company’s topetition berequests ~~used~~a ~~principally~~judgment: to(1) ~~fund~~annulling ~~NYPSC~~and ~~mandated~~setting ~~system~~aside ~~safety~~the Order as arbitrary and ~~reliability~~capricious ~~measures,~~and ~~including~~an ~~replacement~~abuse of ~~older~~discretion, ~~pipe~~affected ~~and~~by ~~regulator~~errors ~~stations;~~of ~~and~~law, ~~purchase~~in ~~equipment,~~violation ~~computer~~of ~~software~~lawful regulatory procedure, and ~~other~~unsupported ~~supplies~~by assubstantial ~~necessary~~evidence toin ~~maintain~~the record, insofar as the ~~distribution~~Order ~~system.~~implements ~~The~~four ~~NYPSC~~areas ~~issued~~of a“austerity” ~~financing~~adjustments ~~order~~and indenies ~~April~~recovery of ~~2021,~~leak ~~permitting~~survey ~~the~~and ~~Company~~repair costs; (2) remanding this matter to ~~issue~~the ~~long~~NYPSC ~~term~~for ~~debt~~further inproceedings consistent with the ~~amount~~Court’s ofjudgment; ~~$19.1~~and ~~million~~(3) granting such other and further relief as may be just and proper. The ~~Gas~~resolution ~~Company~~of ~~has~~this ~~agreed~~matter tois ~~this~~pending ~~financing~~judicial ~~order~~review.

~~Total~~On ~~Regulatory~~July ~~Assets~~16, on2021, the ~~accompanying~~Gas ~~Consolidated~~Company ~~Balance~~filed ~~Sheets~~a asthree-year ~~June~~rate ~~30,~~plan ~~2021~~(Case ~~amounts~~20-G-0394) towith ~~$14,951,279~~the ~~compared~~NYPSC tofor ~~$14,213,457~~rate atyears ~~September~~ending on June 30, ~~2020~~2023, 2024, and 2025. The ~~Regulatory~~rate ~~Assets~~increases ~~include~~requested ~~$977,630~~for atthe ~~June~~three- ~~30,~~year ~~2021~~rate ~~and~~plan (as amended) are $6,555,000, $1,~~435~~030,~~762~~000, atand ~~September 30~~$843,000, ~~2020~~respectively. ~~that~~In isits ~~subject~~filing, tothe ~~Deferred~~Gas ~~Accounting~~Company ~~Petitions~~proposes ~~with~~a ~~the~~rate ~~NYPSC~~plan ~~and~~with ~~PAPUC.~~levelized ~~The~~increases ~~remaining~~over ~~items~~three years in ~~regulatory~~the ~~assets~~amount ~~are~~of ~~either~~$3,761,000 ~~approved~~per inyear. These rates, ~~part~~if ofimplemented, ~~annual~~would ~~reconciliations~~impact ~~approved~~customer bills by ~~the~~11.14% ~~NYSPSC~~in ~~and~~each ~~PAPUC,~~year. ~~being~~The ~~challenged~~resolution inof ~~court~~this ormatter ~~approved~~is ~~through~~under ~~various~~review ~~commission~~by ~~directives~~the NYPSC.

In March of 2021, the NYPSC issued a “Show Cause” order instructing Corning Gas to show cause why its Paycheck Protection Program loan in the amount of $970,000 should not be refunded to its customers if and when the loan is forgiven. On ~~April~~May 3013, 2021, the Gas Company ~~and~~responded ~~Argo~~to ~~filed~~the ~~with~~“Show Cause” order supporting its position that it will use the ~~NYPSC~~PPP aloan ~~Verified~~proceeds ~~Joint~~to ~~Petition~~fund ~~seeking~~COVID ~~NYPSC~~operating ~~approval~~costs, ~~pursuant~~lost tocommercial ~~Section~~revenues, 70and ofcustomer ~~the~~bad ~~New~~debt ~~York~~increases. ~~Public~~On ~~Service~~May ~~Law~~21, ~~for~~2021, ~~its~~the ~~merger~~Corning Gas PPP loan was forgiven. ~~There~~This matter is nopending ~~statutory~~with ~~timeline~~the ~~for~~NYPSC. ~~the~~The NYPSC staff has filed testimony on November 12, 2021 in Case 20-G-0394 on how to ~~make~~resolve ~~its~~the ~~decision~~issues ~~concerning~~raised in the ~~petition~~NYPSC “Show Cause” order. The Company expects that the issue will be resolved in the pending rate case.

~~Also~~By onpetition ~~April~~dated 30September 3, ~~2021~~2020 in Case 20-G-0442, ~~the~~Corning ~~Company~~Gas ~~and~~requested ~~Argo~~authority ~~filed~~under ~~with~~Public ~~the~~Service ~~PAPUC~~Law aSection ~~Joint~~69 ~~Application~~to ~~requesting~~issue ~~certificates~~approximately $29.5 million of ~~public~~long ~~convenience~~term ~~from~~debt ~~the~~through ~~PAPUC~~December 31, 2024. The proceeds are to be used principally to fund NYPSC mandated system safety and ~~seeking~~reliability ~~all~~measures, including replacement of older pipe and regulator stations; and purchase equipment, computer software and other ~~PAPUC~~supplies ~~approvals~~as necessary ~~for~~to maintain the ~~merger~~distribution system. ~~There~~The isNYPSC noissued ~~statutory~~a ~~deadline~~financing ~~for~~order ~~the~~in ~~PAPUC~~April toof ~~decide~~2021 ~~this~~permitting ~~type~~the ofGas ~~application~~Company ~~which~~to ~~seeks~~issue long term debt in the ~~issuance~~amount of a$19.1 ~~certificate~~million, ofalong ~~public~~with ~~convenience~~certain reporting requirements.

On October 24, 2020, Pike filed separate rate cases with the PAPUC for an increase in revenues for its electric services in the amount of $1,933,600 (Case R-2020-302235) and for an increase in revenues for its gas services in the amount of $262,200 (Case R-2020-3022134). Pike’s current rates have been in effect since 2014. In March of 2021, the parties to the rate cases agreed to settlements in both the electric case and the gas case, resulting in a rate increase of $1.4 million for electric, and $225,000 for gas. On June 25, 2021, the PAPUC issued a rate order approving the gas rate increase of $225,000, and on July 15, 2021, the PAPUC issued a rate order approving the electric rate increase in the amount of $1.4 million. Both rate increases took effect on July 28, 2021.

Note 10 – Segment Reporting

The Company’s reportable segments have been determined based upon the nature of the products and services offered, customer base, availability of discrete internal financial information, homogeneity of products, delivery channel and other factors.

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The Gas Company is a gas distribution company providing gas on a commodity and transportation basis to its customers in the Southern Tier of New York State. Pike provides electricity and natural gas services to Pike County, Pennsylvania. Leatherstocking Gas and Leatherstocking Pipeline are presented together as the Leatherstocking Companies in the table below. Leatherstocking Gas provided natural gas service to customers in northeast Pennsylvania. Leatherstocking Pipeline has had no revenues since 2018. The Holding Company is the parent company of all subsidiaries and, ~~has~~until December 31, 2021, had a 50% ownership in Leatherstocking NY. The Appliance Company’s information is presented with the Holding Company as it has little activity.

The following table reflects the results of the segments consistent with the Holding Company’s internal financial reporting process. The following results are used in part, by management, both in evaluating the performance of, and in allocating resources to, each of the segments.

As of and for the three months ended ~~June~~December 3031, 2021

							Leatherstocking			Holding			Total
	Gas Company			Pike			Companies*			Company			Consolidated
Total electric utility revenue	$	-		$	12,~~732~~765,~~254~~623		$	-		$	-		$	12,~~732~~765,~~254~~623
Total gas utility revenue	$	56,~~240~~758,~~170~~584		$	~~297~~581,~~800~~114		$	~~214~~372,~~716~~952		$	-		$	57,~~752~~712,~~686~~650
Investment income	$	92108,~~272~~499		$	-		$	-		$	10-		$	92108,~~282~~499
Income (loss) on joint ventures	$	-		$	-		$	-		$	5,022		$	5,022
Loss associated with joint ventures	$	-		$	-		$	-		$	(164,003	)	$	(164,003	)
Net income (loss)	$	~~523~~556,~~241~~606		$	79419,~~953~~013		$	(~~132~~67,~~069~~436	)	$	(~~198~~443,~~259~~890	)	$	~~272~~464,~~866~~293
Income tax expense (benefit)	$	~~(273~~192,~~686~~093	)	$	~~(28~~175,~~188~~747	)	$	(5621,~~868~~994	)	$	(~~102~~93,~~445~~536	)	$	~~(461~~252,~~187~~310	)
Interest expense	$	~~656~~424,~~976~~502		$	~~159~~166,~~652~~181		$	8384,~~971~~250		$	~~177~~182,~~231~~122		$	1857,~~077,830~~055
Depreciation expense	$	~~486~~500,~~430~~951		$	~~242~~214,~~506~~112		$	91129,~~791~~862		$	915		$	~~821~~845,~~642~~840
Amortization expense	$	5358,~~164~~800		$	76108,~~923~~781		$	3,042		$	12,006		$	~~145~~182,~~135~~629
Total assets	$	97101,~~913~~498,~~031~~133		$	3133,~~126~~214,~~740~~131		$	12,~~699~~861,~~615~~614		$	~~737~~516,~~456~~121		$	~~142~~148,~~476~~089,~~842~~999
Capital expenditures	$	12,~~522~~198,~~861~~758		$	~~721~~570,~~828~~899		$	~~316~~159,~~642~~135		$	-		$	2,~~561~~928,~~331~~792
*Acquired July 1, 2020

As of and for the three months ended ~~June~~December 3031, 2020

						Leatherstocking		Holding			Total
	Gas Company		Pike			Companies*		Company			Consolidated
Total electric utility revenue	$	-	$	1,~~448~~897,~~456~~249		$	-	$	-		$	1,~~448~~897,~~456~~249
Total gas utility revenue	$	5,~~263~~497,~~478~~627	$	~~276~~520,~~818~~178		$	-404,344	$	-		$	56,~~540~~422,~~296~~149
Investment income (expense)	$	173,752	$	-		$	-	$	(8,622	)	$	165,130
Investment income	$	143,709	$	-		$	-	$	17		$	143,726
Loss from joint ventures	$	-	$	-		$	-	$	(53,912	)	$	(53,912	)
Loss associated with joint venture	$	-	$	-		$	-	$	(1,701	)	$	(1,701	)
Net income (loss)	$	~~542~~558,~~944~~640	$	(50106,~~740~~590	)	$	-(37,640)	$	65(231,~~401~~236	)	$	~~557~~183,~~605~~174
Income tax expense (benefit)	$	~~293~~242,~~408~~895	$	(1341,~~023~~138	)	$	-(24,098)	$	(~~288~~21,~~030~~972	)	$	(7155,~~645~~687	)
Interest expense	$	~~326~~335,~~616~~785	$	~~162~~157,~~552~~519		$	-74,910	$	~~136~~177,~~113~~231		$	~~625~~745,~~281~~445
Depreciation expense	$	~~466~~492,~~658~~562	$	~~181~~228,~~074~~777		$	-147,186	$	915		$	~~648~~869,~~647~~440
Amortization expense	$	6858,~~190~~800	$	97108,~~431~~781		$	-3,042	$	1112,~~965~~006		$	~~177~~182,~~586~~629
Total assets	$	9296,~~719~~304,~~009~~144	$	2829,~~938~~699,~~796~~773		$	-12,630,848	$	3824,~~339,499~~836		$	~~124~~139,~~997~~459,~~304~~601
Capital expenditures	$	1,~~231~~347,~~859~~839	$	~~551~~929,~~212~~859		$	-100,808	$	-		$	12,~~783~~378,~~071~~506
*Acquired July 1, 2020

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As of and for the nine months ended June 30, 2021

					Leatherstocking			Holding			Total
	Gas Company		Pike		Companies*			Company			Consolidated
Total electric utility revenue	$	-	$	5,396,020	$	-		$	-		$	5,396,020
Total gas utility revenue	$	20,780,160	$	1,699,504	$	1,151,693		$	-		$	23,631,357
Investment income	$	361,767	$	-	$	-		$	54		$	361,821
Loss from joint ventures	$	-	$	-	$	-		$	(2,491	)	$	(2,491	)
Net income (loss)	$	3,607,108	$	176,704	$	(84,056	)	$	(913,649	)	$	2,786,107
Income tax expense (benefit)	$	927,446	$	24,649	$	(69,521	)	$	(199,656	)	$	682,918
Interest expense	$	1,324,312	$	472,847	$	239,625		$	531,693		$	2,568,477
Depreciation expense	$	1,476,765	$	713,789	$	356,552		$	2,745		$	2,549,851
Amortization expense	$	184,595	$	262,627	$	9,126		$	36,018		$	492,366
Total assets	$	97,913,031	$	31,126,740	$	12,699,615		$	737,456		$	142,476,842
Capital expenditures	$	4,031,438	$	2,246,512	$	678,887		$	-		$	6,956,837
*Acquired July 1, 2020

As of and for the nine months ended June 30, 2020

					Leatherstocking		Holding			Total
	Gas Company		Pike		Companies*		Company			Consolidated
Total electric utility revenue	$	-	$	4,774,273	$	-	$	-		$	4,774,273
Total gas utility revenue	$	21,010,695	$	1,311,160	$	-	$	-		$	22,321,855
Investment income	$	96,290	$	-	$	-	$	114		$	96,404
Income from joint ventures	$	-	$	-	$	-	$	(50,442	)	$	(50,442	)
Net income (loss)	$	3,725,463	$	65,949	$	-	$	(74,650	)	$	3,716,762
Income tax expense (benefit)	$	1,387,459	$	49,220	$	-	$	(278,634	)	$	1,158,045
Interest expense	$	1,018,235	$	508,082	$	-	$	317,951		$	1,844,268
Depreciation expense	$	1,402,213	$	543,222	$	-	$	2,745		$	1,948,180
Amortization expense	$	221,629	$	303,767	$	-	$	35,853		$	561,249
Total assets	$	92,719,009	$	28,938,796	$	-	$	3,339,499		$	124,997,304
Capital expenditures	$	4,329,908	$	1,610,654	$	-	$	-		$	5,940,562
*Acquired July 1, 2020

Note 11 – Subsequent Events

~~Article~~On 78January 14, 2022, the Company extended until May 1, 2025 change in control agreements with Matthew Cook (Senior Vice President and Chief Operating Officer) and Russell Miller (Senior Vice President and Chief Information Officer). The agreements were due to expire on May 1, 2022. Also on January 14, 2022, the Company entered into a change in control agreement with Julie A. Lewis, the Company’s corporate secretary. Ms. Lewis’s change in control agreement expires on May 1, 2025.

~~The~~Under ~~Gas~~each ~~Company,~~change onin ~~July~~control 15agreement, ~~2021,~~upon ~~filed~~termination aof ~~petition~~the executive’s employment with the ~~State~~Company ofwithin ~~New~~twelve ~~York~~months ~~Supreme~~following ~~Court~~a “change in ~~Albany~~control” ~~County~~as ~~pursuant~~defined in the agreements, unless termination is due to ~~Article~~the 78executive’s ofdeath , or by the ~~Civil~~Company ~~Practice~~for ~~Law~~“cause” ~~and~~or ~~Rules~~“disability”, toas ~~review~~defined ~~and~~in ~~set~~the ~~aside~~agreements, or by the ~~NYPSC’s~~executive ~~May~~other ~~19,~~than ~~2021~~for ~~Order~~“good ~~that~~reason” ~~was~~as ~~issued~~defined in ~~PSC~~the ~~cases~~agreements, ~~20-G-0101~~the ~~and~~Company ~~16-G-0204~~will ~~involving~~be required to pay to the ~~Gas~~executive ~~Company~~the following: (i) the executive’s ~~rates~~full ~~for~~salary ~~gas~~through ~~services~~the ~~(See~~date ~~Note~~of 9termination –and ~~Regulatory~~all ~~Matters~~other unpaid amounts to which the executive is entitled under any plan or other arrangement, and (ii). ~~The~~an ~~Company~~amount equal to the executive’s ~~petition~~annualized ~~claims~~includable ~~that~~compensation for the ~~NYPSC’s~~base ~~decision~~period ~~was~~(within ~~arbitrary~~the ~~and~~meaning ~~capricious~~of ~~and~~Code anSec ~~abuse~~280G of ~~discretion,~~the ~~affected~~Internal byRevenue ~~errors~~Code) ofwhich ~~law,~~payments ~~and~~must inbe ~~violation~~made ofwithin ~~established~~90 ~~regulatory~~days ~~procedure~~after the executive’s separation from service.

~~The~~On ~~Gas~~February ~~Company’s petition requests a judgment: (1) annulling and setting aside the Order as arbitrary~~3, ~~capricious and an abuse of discretion~~2022, ~~affected by errors of law, in violation of lawful regulatory procedure, and unsupported by substantial evidence in~~ the ~~record,~~PAPUC ~~insofar~~approved as the ~~Order implements four areas of “austerity” adjustments and denies recovery of leak survey and repair costs; (2) remanding this matter to the NYPSC for further proceedings consistent with the Court~~Company’s ~~judgment;~~Merger ~~and~~transaction ~~(3)~~with ~~granting~~Argo. ~~such~~The ~~other~~Merger ~~and~~transaction ~~further~~remains ~~relief~~under asreview ~~may~~by bethe ~~just and proper~~NYPSC.

~~The resolution of this matter is unknown.~~23

~~Rate~~Item ~~Case~~2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OnCautionary Statement ~~July~~Regarding ~~16, 2021, the Gas Company filed a three~~Forward-~~year~~Looking rate plan with the NYPSC for rate years ending on June 30, 2023, 2024, and 2025. The rate increases requested for the three year rate plan are $5,758,453, $1,643,355, and $989,061, respectively. In its filing, the Gas Company proposes a rate plan with levelized increases over three years in the amount of $3,591,855 per year. These rates, if implemented, would impact customer bills by 11.14% in each year.Statements

28This report contains statements which, to the extent they are not recitations of historical facts, constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (Reform Act). The words "estimate", "project", "anticipate", "expect", "intend", "believe", "could" and similar expressions are intended to identify forward-looking statements. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. As forward-looking statements, these statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the expected results. Accordingly, actual results may differ materially from those expressed in any forward-looking statements. Factors that could cause results to differ materially from our management's expectations include, but are not limited to, those listed under Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, in addition to:

~~Table~~* the impact of ~~Contents~~the COVID-19 pandemic, * completion of the pending merger with Argo, * the effect of an interruption in our supply of natural gas or electricity or a substantial increase in the price of natural gas or electricity, * our ability to successfully negotiate new supply agreements for natural gas and electricity as they expire, on terms favorable to us, or at all, * the effect on our operations of actions by the NYPSC or PAPUC, * the effect of litigation,

The requested rate increases are caused by the need to fund capital expenditures mandated by the NYPSC, recovery of increased property taxes, insurance and labor costs, and other operating expenses. The return on equity (“ROE”) requested in this case is 10.2%. The current allowed ROE is 8.8%. 24

ATable ~~decision~~of on the Gas Company’s filing is expected within eleven months from the filing date. The NYPSC can approve, deny or modify the Company’s request. The NYPSC can also combine this rate case with the merger case (See Note 1 – “Basis For Presentation”).Contents

~~Taxes~~* the effect on our operations of unexpected changes in legal or regulatory requirements, including environmental and energy consumption regulations and laws, * the amount of natural gas produced and directed through our pipeline by producers, * our successful completion of various capital projects and the use of pipelines, compressor stations and storage by customers and counterparties at levels consistent with our expectations, * The effect of weather on our utility infrastructure, * our ability to retain the services of our senior executives and other key employees, * our vulnerability to adverse economic and industry conditions generally and particularly the effect of those conditions on our major customers, * the impact of New York State’s Climate Leadership and Community Protection Act legislation on the Company’s sales and its ability to recover in cost of service through depreciation expense its investment in utility plant, * the effect of any leaks in our transportation and delivery pipelines, * competition to our gas transportation business from other pipelines, and * the possibility of cyber and malware attacks.

~~The~~Forward-looking ~~Gas~~statements ~~Company~~speak ~~contested~~only ~~property~~as ~~tax~~of ~~assessments on its inactive compressor station facility located in~~ the ~~Town~~date ofthey ~~Caton~~are made, ~~New York for tax years 2019~~ and we ~~2020.~~undertake ~~The~~no ~~parties~~obligation to ~~this~~update ~~contest~~any ~~have~~forward-looking ~~agreed~~statement ~~to a settlement that we expect to conclude~~ in ~~the~~light ~~fourth quarter~~ of ~~2021,~~new ~~that~~information ~~will~~or ~~result in a refund of property taxes and income of approximately $100,000, and~~ future ~~property tax reductions of approximately $50,000 per year~~events.

On July 1, 2021, the Gas Company filed amended payroll tax returns seeking a refund of federal payroll taxes in the amount of $53,000 related to payroll tax relief provided for COVID related paid leave for its employees. Overview

~~Item~~In fiscal 22021, the Company pursued rate cases in New York and Pennsylvania, and its Argo merger case in New York and Pennsylvania. ~~Management’s~~We completed ~~Discussion~~our two Pennsylvania rate cases in the summer of 2021 with new electric and ~~Analysis~~gas rates taking effect on July 28, 2021. Our New York rate case, which we filed in July of ~~Financial~~2021, ~~Condition~~is under consideration by the New York Public Service Commission, and ~~Results~~we expect new rates to take effect in July of ~~Operations~~2022. The Pennsylvania Public Utility Commission approved our merger with Argo on February 3, 2022. Our regulatory investments have improved our business outlook. Our results at Pike for the first quarter of this fiscal year are significantly better than in prior years in terms of higher revenues and margins. We expect similar financial improvements resulting from our New York rate case.

~~Cautionary~~We ~~Statement~~look ~~Regarding~~forward ~~Forward-Looking~~to ~~Statements~~completing our merger with Argo in the second or third quarter of fiscal 2022. Our merger will result in reduced operating costs and will provide us the financial backing to continue to expand our customer base and to invest in capital that will promote safe and reliable energy service to our customers.

~~This~~As we ~~report~~emerge ~~contains~~from ~~statements which, to~~ the ~~extent they~~Covid ~~are not recitations of historical facts~~pandemic, ~~constitute~~our ~~"forward-looking~~focus ~~statements"~~continues ~~within~~to ~~the~~be ~~meaning~~on of the ~~U.S.~~safety ~~Private Securities Litigation Reform Act~~ of ~~1995~~our ~~(Reform Act). The words "estimate"~~customers, ~~"project",~~our ~~"anticipate"~~employees, ~~"expect", "intend", "believe", "could"~~ and ~~similar~~the ~~expressions~~residents ~~are~~of ~~intended~~our ~~to identify forward-looking statements~~service territories. ~~All~~We ~~such forward-looking statements~~ are ~~intended~~working towith beour ~~subject~~customers to ~~the~~assist ~~safe~~those ~~harbor~~in ~~protection~~need ~~provided~~with byaccess ~~the~~to ~~Reform~~assistance ~~Act. Although we believe that the expectations reflected~~ in ~~these~~keeping ~~forward-looking~~current ~~statements~~with ~~are~~their ~~based on reasonable assumptions, we can give no assurance that our expectations will~~utility ~~be achieved~~bills. AsWe ~~forward-looking~~are ~~statements,~~also ~~these~~working ~~statements~~on ~~involve~~investment ~~risks, uncertainties~~ and ~~other~~joint ~~factors~~ventures ~~that could cause actual results to differ materially from the expected results. Accordingly, actual results may differ materially from those expressed~~ in ~~any~~renewable ~~forward-looking statements.~~energy ~~Factors~~projects that ~~could~~will ~~cause~~promote ~~results~~environmentally tofriendly ~~differ~~clean energy ~~materially from our management's expectations include, but are not limited~~ to~~, those~~ ~~listed~~customers ~~under~~in ~~Item 1A - "Risk Factors" of~~ our ~~Annual~~service ~~Report~~territories. ~~on Form 10-K for the fiscal year ended September 30, 2020, in addition to:~~

*We ~~the~~believe ~~impact~~our ofkey ~~the~~performance ~~COVID-19~~indicators ~~pandemic~~are net income, *stockholders’ ~~completion~~equity ofand the ~~pending~~safety ~~merger~~and ~~with~~reliability ~~Argo,~~of *our ~~the~~systems. ~~effect~~Net ofincome anincreased ~~interruption~~by in$281,119 ~~our~~for ~~supply~~the ofthree ~~natural~~months ended ~~gas~~December or31, ~~electricity~~2021 or(“Q1 aFY ~~substantial~~2022”) ~~increase~~compared into the ~~price~~three ofmonths ~~natural~~ended ~~gas~~December ~~or electricity~~31, *2020 ~~our~~(“Q1 ~~ability~~FY to2021”). ~~successfully~~Earnings per ~~negotiate~~share ~~new~~increased ~~supply~~from ~~agreements~~$0.04 ~~for~~per ~~natural~~share ~~gas~~to ~~and~~$0.13 ~~electricity~~per asshare ~~they~~in ~~expire,~~this onsame ~~terms~~time ~~favorable~~period. toOur ~~us,~~earnings orincrease atreflects ~~all,~~an *increase ~~the~~in ~~effect~~both gas onand ~~our~~electric ~~operations~~revenues ofat ~~actions~~Corning byand ~~the~~at ~~NYPSC~~Pike, orand ~~PAPUC~~gross margin at Pike, *reduced ~~the~~by ~~effect~~Holding ofCompany’s ~~litigation,~~non-recurring *charge ~~the~~for a ~~effect~~loss on ~~our~~the ~~operations~~sale of ~~unexpected~~Leatherstocking ~~changes~~of inNew ~~legal~~York orof ~~regulatory requirements~~$164,000 ~~including~~(pre ~~environmental~~tax), and ~~energy~~higher ~~consumption~~transaction ~~regulations~~costs ~~and~~at ~~laws,~~Holding *Company. Because the Holding ~~amount~~Company’s ofprincipal ~~natural~~operations ~~gas~~are ~~produced~~conducted ~~and~~through ~~directed~~Corning ~~through~~Gas, ~~our~~Pike, ~~pipeline~~and byLeatherstocking, ~~producers~~all regulated utility companies, stockholders’ *equity ~~our~~is ~~successful~~an ~~completion~~important ofperformance ~~various~~indicator. ~~capital~~The ~~projects~~NYPSC and PAPUC allow the ~~use~~Company ofthe ~~pipelines,~~opportunities ~~compressor~~to ~~stations~~earn a just and ~~storage~~reasonable byreturn ~~customers~~on ~~and~~stockholders’ ~~counterparties~~equity atas ~~levels~~determined ~~consistent~~under ~~with~~applicable ~~our~~regulations. ~~expectations,~~Stockholders’ *equity ~~The~~is, ~~effect~~therefore, a precursor of ~~weather~~future onearnings ~~our~~potential. ~~utility~~As ~~infrastructure,~~of *December ~~our~~31, ~~ability~~2021, compared to ~~retain~~December ~~the~~31, ~~services~~2020, ofstockholders’ ~~our~~equity ~~senior~~decreased slightly ~~executives~~from ~~and~~$35,679,280 ~~other~~to ~~key employees~~$35,405,810. *We ~~our~~plan ~~vulnerability~~ to ~~adverse~~continue ~~economic~~our ~~and~~focus ~~industry~~on ~~conditions~~building ~~generally~~stockholders’ equity. Safety and ~~particularly~~efficiency indicators ~~the~~include ~~effect~~leak ofrepair, ~~those~~main ~~conditions~~and onservice ~~our~~replacements ~~major~~and ~~customers,~~customer service metrics.

2925

Table of Contents

*We continue to focus on improving the ~~impact~~efficiency of our ~~New~~operations ~~York~~and ~~State~~making capital investments to improve our infrastructure. Corning Gas’s ~~Climate~~infrastructure ~~Leadership~~improvement program concentrates on the replacement of older distribution mains and ~~Community~~customer ~~Protection~~service ~~Act~~lines. ~~legislation~~In onQ1 FY 2022 the Gas Company’s ~~ability~~repaired to26 ~~recover~~leaks, inreplaced ~~cost~~93 bare ofsteel ~~service~~services ~~through~~and ~~depreciation~~replaced ~~expense~~or ~~its~~remediated ~~investment~~3.7 inmiles ~~utility~~of ~~plant,~~older *steel main. In fiscal 2021 the ~~effect~~Gas ofCompany ~~any~~repaired 110 leaks inand ~~our~~replaced 9.0 ~~transportation~~miles of bare steel main and ~~delivery~~176 ~~pipelines,~~bare *steel ~~competition~~services. In Q1 FY 2022 Pike replaced approximately 11 poles. In fiscal 2021 Pike replaced approximately 82 poles and did extensive tree trimming to maintain our electric infrastructure. On January 18, 2019 Pike filed a gas ~~transportation~~Long Term ~~business~~Infrastructure ~~from~~Improvement ~~other~~Plan ~~pipelines~~(“LTIIP”) to accelerate replacement of cast iron, wrought iron and *bare steel pipe over 11 years. The PAPUC approved the ~~possibility~~LTIIP ofplan ~~cyber~~on ~~and~~June ~~malware~~13, ~~attacks~~2019.

~~Forward-looking~~Earnings ~~statements~~for ~~speak~~Q1 ~~only~~FY 2022 were higher than earnings for Q1 FY 2021 as ofa ~~the~~result ~~date~~of ~~they~~higher ~~are~~revenues ~~made~~and margins, mostly related to new electric and gas rates at Pike which took effect in July weof ~~undertake~~2021, noand ~~obligation~~negative toregulatory ~~update~~adjustments ~~any~~that ~~forward-looking~~were ~~statement~~incurred in ~~light~~FY of2021 ~~new~~and ~~information~~not orFY ~~future events~~2022.

~~Overview~~Key financial performance indicators:

Our financial results for the quarter and year to date period ended June 30, 2021, and for the comparable quarter and year to date June 30, 2020, were impacted by several non- recurring, but material events. These events have been described in more detail throughout this report but are summarized in this paragraph. We recognized as non- operating income $1.1 million of PPP loan forgiveness, offset by a regulatory reserve in the amount of $490,000 in 2021. As a result of our rate case that concluded in May of 2021, we wrote down as an operating expense a regulatory asset for leak repairs ($175,000) and as interest expense an accrual of interest income ($231,000), the recovery of which were denied in our rate case. In addition, we incurred additional merger transaction costs in the amount of $126,000. In the third quarter of fiscal 2020, we recognized as a reduction of income tax expense a non- recurring AMT tax credit refund in the account of $272,000. As a result of these non-recurring items, earnings for the quarter were $95,000 (after tax) greater than earnings in the third quarter of fiscal 2020, but operating income for the current fiscal quarter was $218,000 (after tax) lower than operating income for the comparable quarter for fiscal 2020. For our fiscal year to date 2021, earnings were $432,000 (after tax) lower than year to date earnings for fiscal year to date 2020, and operating income for fiscal 2021 was $701,000 (after tax) less than operating income in fiscal 2020.

	Three Months Ended December 31,
	2021		2020
Net income	$	464,293	$	183,174
Stockholders' equity	$	35,405,810	$	35,679,280
Stockholders' equity per outstanding common share	$	11.48	$	11.57

~~New~~Gas ~~York~~Revenue and Pennsylvania government authorities, in response to the COVID-19 pandemic, imposed restrictions on social activities, closed schools and placed operating restrictions on commercial operations in our franchise areas beginning in March of 2020. Many pandemic related restrictions have been lifted and businesses have re-opened. The Company is now focused on completing work on inspecting and remediating interior property/customer services that were restricted during the pandemic, most of which require work done on customer premises. Our customer service specialists are working with customers to bring them current on their utility bills. We are assisting pandemic affected customers to access government funding designed to help customers pay current and past due utility bills. The Company has limited service termination options in New York and in Pennsylvania. The Company is still recovering from the impact of lost revenues, mostly from commercial customers, due to the pandemic.Margin

OnRetail ~~July~~gas revenue increased $1, ~~2020~~247,165 for ~~the~~Q1 ~~Company~~FY ~~completed~~2022 ~~the~~compared ~~acquisition~~ to Q1 FY 2021, all of ~~its~~which ~~partner’s~~was ~~50%~~attributable ~~interests~~to inincreased ~~Leatherstocking~~purchased gas prices. Gas ~~Company,~~revenues ~~LLC,~~were ~~and~~bolstered ~~Leatherstocking~~by new ~~Pipeline~~rates ~~Company~~at Corning and Pike, ~~LLC~~but ~~(the~~were ~~“Leatherstocking Companies”)~~negatively impacted by warmer weather in Q1 FY 2022. ~~Since~~Purchased ~~July~~gas 1,costs ~~2020,~~are ~~the~~subject ~~financial~~to ~~information~~a NYPSC and PAPUC approved reconciliation that permits recovery of ~~the~~all ~~Leatherstocking~~prudently ~~Companies~~incurred iscosts. ~~included~~Higher ingas ~~the~~cost ~~Company’s~~revenues ~~consolidated financial~~do ~~information~~not impact net income.

WeOther ~~believe~~gas ~~our~~revenue ~~key~~increased ~~performance indicators are net income, stockholders’ equity and the safety and reliability of our systems. Net income decreased by~~ $~~284~~43,~~739~~336 for ~~the~~Q1 ~~three~~FY ~~months~~2022 ~~and decreased $930,655 for the nine months ended June 30, 2021~~ compared to ~~the~~Q1 ~~three~~FY ~~months and nine months ended June 30, 2020, respectively~~2021. ~~Our~~ ~~decline~~The incomponents earnings is attributable to transaction costs related to our merger (See Note 1), increased interest expense, depreciation expense, a rate decrease in Corning offset by higher investment income and forgiveness of ~~PPP~~this ~~loans.~~increase Inare ~~addition,~~detailed ~~the Company recognized a large non- recurring income tax refund~~ in the ~~third~~tables ~~quarter of fiscal 2020, which increased 2020 earnings for both the third quarter and for the fiscal year 2020~~below. Because the Holding Company’s principal operations are conducted through Corning Gas and Pike, both regulated utility companies, stockholders’ equity is an important performance indicator. The NYPSC and PAPUC allow the Company the opportunities to earn a just and reasonable return on stockholders’ equity as determined under applicable regulations. Stockholders’ equity is, therefore, a precursor of future earnings potential. As of June 30, 2021, compared to June 30, 2020, stockholders’ equity increased from $36,866,581 to $37,243,854. We plan to continue our focus on building stockholders’ equity. Safety and efficiency indicators include leak repair, main and service replacements and customer service metrics.

	Q1 FY 2022		Q1 FY 2021
Retail gas revenue:
Residential	$	4,687,893	$	3,946,522
Commercial		907,896		653,697
Transportation		1,260,471		1,230,207
Wholesale		704,200		482,869
Total retail gas revenue		7,560,460		6,313,295

Other gas revenue:
Local production		69,065		175,605
Customer discounts forfeited		6		(28	)
Reconnect fees		541		65
Surcharges		407		(4,677	)
Other (see detail below)		82,171		(62,111	)
Total other gas revenue		152,190		108,854

Total gas operating revenue	$	7,712,650	$	6,422,149

~~Table of Contents~~26

WeTable ~~continue to focus on improving the efficiency~~ of ~~our~~ operations and making capital investments to improve our infrastructure. Corning Gas’s infrastructure improvement program concentrates on the replacement of older distribution mains and customer service lines. In the first nine months of fiscal 2021 the Gas Company repaired 77 leaks, replaced 138 bare steel services and replaced or remediated 7.24 miles of older steel main. In fiscal 2020 the Gas Company repaired 184 leaks, replaced 229 bare steel services and replaced 8.6 miles of older steel main. In the first nine months of fiscal 2021 Pike replaced approximately 74 poles. In fiscal 2020 Pike replaced approximately 150 poles and did extensive tree trimming to maintain our electric infrastructure. On January 18, 2019 Pike filed a gas Long Term Infrastructure Improvement Plan (“LTIIP”) to accelerate replacement of cast iron, wrought iron and bare steel pipe over 11 years. The PAPUC approved the LTIIP plan on June 13, 2019.Contents

~~Key~~The ~~financial~~following ~~performance~~tables ~~indicators~~further summarize all other income in the other gas revenue table above:

	Three Months Ended June 30,						Nine Months Ended June 30,
		Q1 FY 2022			Q1 FY 2021
	2021			2020			2021		2020
Other gas revenue:
Net income	$	272,866		$	557,605		$	2,786,107	$	3,716,762
Delivery Rate Adjustment (DRA) carrying costs	$	1,368		$	2,225
Stockholders' equity	$	37,243,854		$	36,866,581		$	37,243,854	$	36,866,581
Contract customer reconciliation		3,121			(11,079	)
Stockholders' equity per outstanding common share	$	12.08		$	12.02		$	12.08	$	12.02
Monthly Revenue Decoupling Mechanism (‘RDM’) amortizations		50,484			(183,097	)
Local production revenue		(100	)		13,960
2017 Jobs Act federal income tax reconciliation		—			103,682
Capacity release revenue		7,180			8,754
All other		20,118			3,444
Total other gas revenue	$	82,171		($	62,111	)

Gas ~~Revenue~~purchases ~~and~~are ~~Margin~~our largest expenses. Purchased gas expense increased $1,315,068 for Q1 FY 2022 compared to Q1 FY 2021. The increase in costs is due primarily to higher purchased gas costs.

~~Retail~~We ~~gas~~anticipate ~~revenue~~that ~~decreased $33,362 for~~ the ~~three months~~cost ~~ended~~of ~~June~~purchased ~~30,~~natural ~~2021~~gas will ~~and~~increase ~~increased~~in ~~$1,069,382 for~~ the ~~nine~~near ~~months~~term ~~ended~~due ~~June 30, 2021 compared~~ to the ~~same~~post ~~periods~~pandemic ~~last~~demand ~~year. The revenue decrease~~ for ~~the~~energy ~~three~~and ~~month~~current ~~period~~economic ~~results~~conditions. ~~from~~Increases ~~an increase~~ in ~~gas~~the ~~costs~~cost ~~recovery~~ of ~~$443,890 offset by a decrease in delivery~~gas ~~revenues~~should ofbe ~~$477,252.~~tempered ~~The~~by ~~revenue~~our ~~increase~~access ~~for~~to ~~the~~low ~~nine month period includes higher gas~~ cost ~~recovery~~local ofproduction ~~$1,140,018 offset by a decrease in delivery revenues of $70,636~~gas.

~~Other~~Gas margin (the excess of utility gas revenue ~~increased~~over the ~~$245,752~~cost ~~for~~of ~~the~~natural ~~three months~~gas ~~and~~purchased) decreased $~~240~~24,~~120~~567 for ~~the~~Q1 ~~nine~~FY ~~months~~2022 ~~ended~~compared ~~June~~to ~~30,~~Q1 FY 2021 or approximately (0.48%). Gas margin percentage decreased 13.74% for FY 2022 compared to ~~the~~FY ~~same~~2021. ~~periods~~Gas ~~last~~revenues ~~year~~increased 20.09% ~~The~~and ~~components~~purchased ofgas ~~this~~expense ~~increase~~increased ~~are~~103.57%. The gas margin ~~detailed~~percentages inwere ~~the~~negatively ~~tables~~impacted ~~below~~by higher purchased gas costs of $1,315,068.

	Three months ended June 30,						Nine months ended June 30,
	Q1 FY 2022			Q1 FY 2021
	2021			2020			2021			2020
Gas Margin:
Retail gas revenue:
Utility Gas Revenues	$	7,712,650		$	6,422,149
Residential	$	3,440,603		$	3,753,207		$	14,673,030		$	14,328,356
Natural Gas Purchased		2,584,750			1,269,682
Commercial		570,433			427,187			2,556,525			2,184,918
Gas Margin	$	5,127,900		$	5,152,467
Transportation		1,046,768			937,403			3,936,348			3,679,551
Gas Margin Percentage		66.49%			80.23%
Wholesale		366,319			339,688			1,603,141			1,506,837
Total retail gas revenue	$	5,424,123		$	5,457,485		$	22,769,044		$	21,699,662
Other gas revenue:
Local production	$	105,206		$	170,495		$	459,692		$	533,743
Customer discounts forfeited		(26	)		(246	)		(34	)		39,731
Reconnect fees		195			22			255			1,374
Surcharges		1,072			173			(843	)		1,226
Other (see detail below)		222,116			(87,633	)		403,243			46,119
Total other gas revenue	$	328,563		$	82,811		$	862,313		$	622,193
Total gas operating revenue	$	5,752,686		$	5,540,296		$	23,631,357		$	22,321,855

31 Electric Revenue and Margin

~~Table~~Retail electric revenue increased $748,337 for Q1 FY 2022 compared to Q1 FY 2021. This increase was mainly attributable to increased purchased power costs of ~~Contents~~ $488,303 and increased customer usage of $260,034. Our customer usage increase reflects new electric rates at Pike that took effect in July of 2021. Purchased electricity costs are subject to a PAPUC approved reconciliation that permits recovery of all prudently incurred costs. Higher purchased electricity costs do not impact net income.

~~The~~Other ~~following~~electric ~~table~~revenue ~~details~~increased ~~amounts~~$120,037 ~~making~~for upQ1 ~~the~~FY 2022 ~~Other~~compared ~~line~~to inQ1 ~~the~~FY ~~schedule~~ 2021. The components of ~~Other~~this ~~gas~~increase ~~revenue~~are ~~above:~~detailed in the tables below.

	Three months ended June 30,						Nine months ended June 30,
	Q1 FY 2022			Q1 FY 2021
	2021			2020			2021			2020
Retail electric revenue:
Other gas revenues:
Residential	$	1,274,767		$	977,919
Delivery Rate Adjustment (DRA) carrying costs	$	857		$	829		$	3,904		$	4,617
Commercial		1,331,176			887,934
Contract customer reconciliation		565			21,275			(71,909	)		(113,780	)
Street lights		40,853			32,606
Monthly RDM amortizations		124,162			(250,641	)		38,461			(483,712	)
Total retail electric revenue	$	2,646,796		$	1,898,459
Local production revenues		(2,963	)		17,377			23,041			37,200
Other electric revenue:
2017 Jobs Act federal Income tax reconciliation		464,159			89,039			920,923			540,789
Third party billings	$	47,974		$	253
Regulatory liability reserve		(340,929	)		—			(512,839	)		—
Other		70,853			(1,463	)
Customer performance incentive		—			32,000			—			32,000
Total other electric revenue		118,827			(1,210	)
Capacity release revenues		7,309			7,190			28,136			33,249
Total electric operating revenue	$	2,765,623		$	1,897,249
All other		(31,044	)		(4,702	)		(26,474	)		(4,244	)
Total other gas revenues	$	222,116		($	87,633	)	$	403,243		$	46,119

Gas purchases are our largest expenses. Purchased gas expense increased $442,714 for the three months ended June 30, 2021 and $904,965 for the nine months ended June 30, 2021 compared to the same periods last year. The increase in costs for the three month period is due primarily to higher gas cost purchases in the amount of $266,310 and an increase in prior period gas cost recoveries in the amount of $176,404. The increase in costs for the nine month period is due primarily to higher gas cost purchases in the amount of $282,804 and an increase in prior period gas cost recoveries in the amount of $622,161.27

~~Gas~~Table ~~margin (the excess~~ of utility gas revenue over the cost of natural gas purchased) decreased $230,324 for the three months ended June 30, 2021 and increased $404,537 for the nine months ended June 30, 2021 compared to the same periods last year. The margin for the three month period was negatively impacted by decreased customer sales. The margin for the nine month period was positively impacted by increased customer sales that includes the Leatherstocking Gas purchase on July 1, 2020. The margin for the nine month period was also positively affected by regulatory adjustments associated with a PAPUC fuel audit of $95,158 and prior year gas cost reconciliation of $156,575.Contents

	Three Months Ended June 30,						Nine Months Ended June 30,
	2021			2020			2021			2020
Gas Margin:
Utility Gas Revenues	$	5,752,686		$	5,540,296		$	23,631,357		$	22,321,855
Natural Gas Purchased		1,382,120			939,406			6,131,547			5,226,582
Margin	$	4,370,566		$	4,600,890		$	17,499,810		$	17,095,273
Margin %		75.97	%		83.04	%		74.05	%		76.59	%

Electricity costs increased by $260,671 for Q1 FY 2022 compared to Q1 FY 2021. The increase in costs for FY 2022 is due primarily to an increase in the price of purchased electricity.

~~Electric~~The ~~Revenue~~cost ~~and~~of ~~Margin~~purchased electricity is likely to increase in the near term as electricity prices generally follow the prices of natural gas

~~Retail~~Electric ~~electric~~margin ~~revenue~~(the ~~increased~~excess ~~$268,686~~of ~~for~~utility ~~the~~electric revenue ~~three~~over ~~months~~the ~~ended~~cost ~~June~~of ~~30,~~purchased ~~2021~~power ~~and~~costs) increased $~~650~~607,~~427~~703 for ~~the~~Q1 ~~nine~~FY ~~months~~2022 ~~ended June 30, 2021~~ compared to ~~the~~Q1 ~~same~~FY ~~periods~~2021. ~~last~~Electric ~~year.~~margin ~~The~~percentage ~~increase~~increased 3.70% for ~~the~~FY ~~three~~2022 ~~month~~compared ~~period~~to ~~results~~FY ~~from~~2021. anThe ~~increase~~electric inmargin ~~purchased~~was ~~power~~negatively ~~recovery~~impacted ofby ~~$227,836~~the ~~and~~higher anpurchased ~~increase~~power incosts ~~delivery revenues~~ of $40260,~~850~~621. ~~The~~ The increase ~~for~~in ~~the~~electric ~~nine~~margin ~~month~~resulted ~~period primarily results~~ from ~~increased~~new ~~delivery~~rates ~~revenues~~which oftook ~~$797,168~~effect ~~net~~in ofJuly ~~recovery~~ of ~~lower purchased power costs of $146,741~~2021.

Other electric revenues increased $15,112 for the three months ended June 30, 2021 and decreased $28,680 for the nine months ended June 30, 2021 compared to the same periods last year. The components of these decreases are detailed in the tables below.

	Q1 FY 2022		Q1 FY 2021
Electric Margin:
Utility Electric Revenues	$	2,765,623	$	1,897,249
Electricity Purchased		1,053,752		793,081
Electric Margin	$	1,711,871	$	1,104,168
Electric Margin Percentage		61.90%		58.20%

32 Operating and Interest Expenses

~~Table~~Operating and maintenance expense decreased by $122,273 for Q1 FY 2022 compared to Q1 FY 2021. The decrease primarily results from decrease in expenses related to the COVID pandemic of ~~Contents~~ $68,412 and lower regulatory amortization of $41,569.

	Three months ended June 30,						Nine months ended June 30,
	2021			2020			2021			2020
Retail electric revenue:
Residential	$	846,231		$	746,204		$	2,768,809		$	2,364,886
Commercial		847,893			680,267			2,472,137			2,228,534
Street lights		31,353			30,320			94,814			91,913
Total retail electric revenue	$	1,725,477		$	1,456,791		$	5,335,760		$	4,685,333
Other electric revenue:
Customer discounts forfeited	$	76,701		($	240	)	$	76,701		$	2,761
Third party billings		(59,343	)		3,511			—			104,710
Other		(10,581	)		(11,606	)		(16,441	)		(18,531	)
Total other electric revenue	$	6,777		($	8,335	)	$	60,260		$	88,940
Total electric operating revenue	$	1,732,254		$	1,448,456		$	5,396,020		$	4,774,273

Taxes other than income taxes increased by $84,902 for Q1 FY 2022 compared to Q1 FY 2021. The increase results from a property tax increase of $32,769 and gross receipts tax increase of $58,048 net of decrease in payroll taxes of $5,915.

~~Electricity~~Depreciation ~~costs~~expense ~~increased~~decreased by $~~214~~23,~~394~~600 for ~~the~~Q1 ~~three~~FY ~~months~~2022 ~~ended June 30, 2021 and $705,893 for the nine months ended June 30, 2021~~ compared to ~~the~~Q1 ~~same~~FY ~~periods last year~~2021. The ~~increase for the three month period is due primarily to increases in purchased power costs of $299,429 and a~~ decrease ofresults ~~prior~~from ~~period~~depreciation ~~gas~~expense ~~cost~~on ~~recoveries of~~new ~~$85,036.~~plant ~~The increase for the nine month period is due primarily to increase~~ in ~~purchased~~service ~~power~~being ~~costs~~outweighed ~~needed~~by todepreciation ~~serve our customers~~expense ofending ~~$615,906~~on ~~and~~fully andepreciated ~~unfavorable regulatory adjustment resulting from a PAPUC fuel audit net of prior period gas cost recoveries amounting to $89,987~~assets.

~~Electric~~Interest ~~margin~~expense ~~(the excess of utility electric revenue over the cost of purchased power costs)~~ increased ~~$69,404~~by ~~for the three months ended June 30, 2021 and decreased~~ $84111,~~146~~610 for ~~the~~Q1 ~~nine months~~FY ~~ended June 30, 2021~~ 2022 compared to ~~the~~Q1 ~~same~~FY ~~periods last year~~2021. The ~~margin~~increase ~~for~~was ~~the~~due ~~three~~to ~~month~~higher ~~period~~levels ~~was~~of ~~positively~~debt ~~impacted~~to bysupport ~~increased revenues.~~our ~~The~~mandated ~~margin~~infrastructure ~~for~~improvement ~~the~~program, ~~nine~~and additional ~~month~~dividends ~~period~~associated ~~was~~with ~~negatively~~outstanding ~~impacted~~Preferred bySeries aD ~~regulatory~~shares ~~adjustment~~which ~~resulting~~is ~~from~~recorded aas ~~PAPUC~~interest ~~fuel audit of $198,823~~expense.

	Three Months Ended June 30,						Nine Months Ended June 30,
	2021			2020			2021			2020
Electric Margin:
Utility Electric Revenues	$	1,732,254		$	1,448,456		$	5,396,020		$	4,774,273
Electricity Purchased		478,614			264,220			1,632,781			926,888
Margin	$	1,253,640		$	1,184,236		$	3,763,239		$	3,847,385
Margin %		72.37	%		81.76	%		69.74	%		80.59	%

Liquidity and Capital Resources

~~Operating~~The Holding Company does not have any borrowings (excluding Series A, Series C and ~~Interest~~Series ~~Expenses~~D Preferred Stock that is classified as debt) at the corporate level and has no access to liquidity except through dividends and distributions from its subsidiaries as well as equity issuances. Its principal liquidity requirements are for investments in all three companies to enhance their ability to make the capital expenditures required to provide services to the utilities’ customers.

~~Operating~~The ~~and~~Gas ~~maintenance~~Company’s ~~expense~~internally ~~increased~~generated ~~$1,056,597~~cash ~~for~~from ~~the~~operating ~~three~~activities ~~months~~consists ~~ended~~of ~~June~~net 30income, ~~2021~~adjusted ~~and increased $2,111,346~~ for ~~the~~non-cash ~~nine months ended June 30~~expenses, ~~2021~~and ~~compared~~changes toin ~~the~~operating ~~same~~assets ~~periods last~~and ~~year~~liabilities. ~~The~~Non-cash items ~~increase~~include ~~for~~depreciation ~~the~~and ~~three~~amortization; ~~month~~investment ~~period~~gains ~~primarily~~and ~~results~~losses, ~~from~~and ~~additional~~deferred ~~expenses~~income ~~associated~~taxes. ~~with~~Over ~~100%~~or ~~ownership~~under-recovered ofgas ~~Leatherstocking~~costs ~~Gas~~significantly ~~Company~~impact ofcash ~~$183,962,~~flow. ~~merger~~In ~~costs of $125~~addition,~~913,~~ ~~leak~~there ~~repair~~are ~~write~~significant ~~down~~year-to-year ofchanges ~~$174,773,~~in regulatory ~~liability~~assets ~~reserve~~that ofimpact ~~$490,052~~cash ~~and~~flow. ~~all~~The ~~other~~Gas ~~costs-net~~Company’s ofcash ~~$81,897~~flow is seasonal. ~~The~~Cash ~~increase~~expenditures ~~for~~are the ~~nine~~highest ~~month~~in ~~period~~the ~~primarily~~summer ~~results~~and ~~from~~fall ~~additional~~months ~~expenses~~when ~~associated~~we ~~with~~refill ~~100%~~gas ~~ownership~~storage ofand ~~Leatherstocking~~conduct ~~Gas~~our ~~Company~~construction ofprograms. ~~$545,556,~~Our ~~merger~~cash ~~costs~~receipts ofare ~~$551,296,~~highest ~~leak~~during ~~repair~~the ~~write~~heating ~~down~~season. ofAt ~~$174,773,~~Pike ~~liability~~cash ~~reserve~~flow ofis ~~$490,052~~strongest in the winter and ~~all~~summer ~~other~~when ~~costs,~~customer ~~including~~demand ~~pandemic~~for ~~related~~natural ~~costs,~~gas inand ~~the~~electricity ~~amount~~are ofhighest. $Given ~~349~~year-round electric sales,~~669~~ Pike is less seasonal than the Gas Company.

~~Taxes~~Capital ~~other~~expenditures ~~than~~are ~~income~~funded ~~taxes~~by ~~increased~~both ~~$76,216 for~~operating ~~the~~cash ~~three months ended June 30, 2021~~ and ~~$40,523~~new ~~for~~debt. ~~the~~In ~~nine~~fiscal ~~months~~year ~~ended~~2022 ~~June~~to 30date, ~~2021 compared to~~ the ~~same~~Company ~~periods~~has ~~last~~spent ~~year~~approximately $2.9 ~~The~~million ~~increase for~~on ~~the~~projects ~~three~~and ~~month~~safety-related ~~period~~infrastructure improvements. ~~primarily~~This, ~~results~~in ~~from~~conjunction awith ~~property~~our ~~tax~~growth ~~increase~~projects, ofcreates ~~$58,694~~liquidity ~~and~~pressure ~~gross~~on ~~receipts~~the ~~tax~~Holding ~~increase~~Company. ofWe ~~$10,519~~anticipate ~~net~~that ofour ~~decrease~~aggressive incapital ~~payroll~~construction ~~taxes~~program ofwill ~~$2,997.~~continue ~~The~~to ~~increase~~require ~~for~~ the ~~nine~~Company ~~month~~to ~~period~~raise ~~results~~new ~~from~~debt ~~a property tax increase of $42,310~~ and/or ~~gross receipts increase of $9,888 net of decrease in payroll taxes of $11,675~~equity.

3328

Table of Contents

~~Depreciation~~Cash ~~expense~~flows ~~increased~~from byfinancing ~~$172,995~~activities ~~for~~of the Company ~~three~~consist ~~months~~of ~~ended~~new ~~June~~long-term 30borrowings, ~~2021~~repayment ~~and~~of ~~$601~~long-term debt,~~671~~ ~~for~~net ~~the~~borrowings ~~nine~~and ~~months~~repayments ~~ended~~under ~~June~~our 30lines-of-credit, ~~2021~~and ~~compared~~quarterly dividend topayments. For the ~~same~~Gas ~~periods~~Company’s ~~last~~operations, ~~year~~it has an $8.5 ~~The~~million ~~increases~~revolving line of credit with M&T Bank. Interest ~~resulted~~is ~~from~~a ~~additional~~variable ~~depreciation~~rate ~~expense~~determined ~~from~~by ~~utility~~the ~~plant~~Gas ~~placed~~Company’s infunded ~~service~~debt ~~and~~to ~~depreciation~~EBITDA ~~expense~~ratio ~~associated~~calculated ninety days after the end of each quarter added to the daily LIBOR rate with ~~100%~~no ~~ownership~~additional collateral or covenants beyond those included in the M&T Bank term notes. The amount outstanding under this line as of ~~Leatherstocking~~December ~~assets~~31, 2021 was $5.1 million with an interest rate of 3.1%.

~~Interest~~For ~~expense~~Pike’s ~~increased $452~~operations,~~549~~ ~~for~~it ~~the~~has ~~three months~~an ~~ended~~$2.0 ~~June~~million revolving ~~30,~~line ~~2021~~of ~~and~~credit ~~$724,209~~with ~~for~~M&T ~~the~~Bank. ~~nine~~Interest ~~months~~is ~~ended~~a ~~June~~variable ~~30,~~rate ~~2021~~determined ~~compared~~by toPike’s ~~the~~funded ~~same~~debt ~~periods~~to ~~last~~EBITDA ~~year.~~ratio ~~The increases~~calculated ~~were~~ninety ~~due~~days toafter ~~higher~~the ~~levels~~end of ~~debt~~each toquarter ~~support~~added ~~our~~to ~~mandated~~the ~~infrastructure~~daily ~~improvement~~LIBOR ~~program,~~rate ~~interest expense associated~~ with ~~100%~~no ~~ownership of~~additional ~~Leatherstocking~~collateral ~~assets,~~or ~~write~~covenants ~~down~~beyond ofthose ~~deferred interest expense~~ included in the ~~amount~~M&T ofBank ~~$231,000,~~term ~~and~~notes. ~~additional~~The ~~dividends~~amount ~~associated with~~ outstanding ~~Preferred~~under ~~Series~~this Aline ~~and~~on CDecember ~~shares~~31, ~~which~~2021 ~~are~~was ~~recorded~~approximately as$1.3 million with an interest rate ~~expense~~of 3.25%.

~~Liquidity~~For Leatherstocking’s operations, it has an $1.5 million revolving line of credit with Wayne Bank. Interest on the line of credit is the prime rate (3.25% at December 31, 2021). The line of credit is for an indefinite period, is guaranteed by Leatherstocking Pipeline, and ~~Capital~~is ~~Resources~~secured by Leatherstocking Gas and Leatherstocking Pipeline assets. The amount outstanding under this line on December 31, 2021 was approximately $0.6 million.

The ~~Holding~~ Company ~~does~~was ~~not~~in ~~have~~compliance ~~borrowings~~with ~~(excluding Series~~all Aof ~~and~~its ~~Series C Preferred Stock that is classified as debt) at the corporate level and has no access to liquidity except through~~loan ~~dividends~~covenants ~~and distributions from its subsidiaries~~ as ~~well~~of asDecember equity issuances. Its principal liquidity requirements are for investments in the Leatherstocking Companies to permit those companies to make the capital expenditures required to provide services to their customers31, ~~for~~ ~~dividend payments to the Holding Company’s stockholders and to fund costs associated with the pending merger with Argo~~2021.

~~The~~During Q1 FY 2022, the Gas Company’s ~~internally~~mainly ~~generated cash~~withdrew gas from ~~operating~~storage ~~activities~~and ~~consists~~as of ~~net~~December ~~income~~31, ~~adjusted for non-cash expenses~~2021, ~~and~~had ~~changes~~a inbalance ~~operating~~of ~~assets and liabilities~~$1,384.810 ~~Non-cash items~~worth ~~include~~of ~~depreciation~~gas ~~and~~in ~~amortization~~storage, ~~investment~~the ~~gains~~volume ~~and~~in ~~losses,~~storage ~~and~~at ~~deferred~~December ~~income taxes. Over or under-recovered gas costs~~31, ~~significantly~~2021 ~~impact~~was ~~cash flow. In addition~~506,270 ~~there~~Mcf ~~are~~at ~~significant~~an ~~year-to-year~~average ~~changes~~price inof ~~regulatory~~$2.74 ~~assets~~per ~~that~~Mcf. ~~impact~~At ~~cash~~December ~~flow.~~31, ~~The Gas~~2020, the Company’s ~~cash~~had ~~flow~~a isbalance ~~seasonal.~~of ~~Cash~~$954,679 ~~expenditures~~worth ~~are~~of ~~the~~gas ~~highest~~ in storage, the ~~summer~~volume ~~and~~in ~~fall months when we refill gas~~ storage ~~and~~ ~~conduct~~at ~~our~~December ~~construction~~31, ~~programs.~~2020 ~~Our~~was ~~cash~~550,598 ~~receipts~~Mcf ~~are~~at ~~highest~~an ~~during~~average ~~the~~price ~~heating~~of ~~season~~$1.73 Atper ~~Pike~~Mcf. ~~cash~~During ~~flow~~the isnext ~~strongest~~quarter, in the ~~winter~~Gas ~~and~~Company ~~summer~~expects ~~when~~to ~~customer~~continue ~~demand~~withdrawing ~~for natural~~ gas ~~and~~from ~~electricity~~storage ~~are~~to ~~highest.~~have ~~Given~~sufficient ~~year-round~~gas ~~electric~~to ~~sales,~~supply ~~Pike~~customers isfor ~~less seasonal than~~ the ~~Gas~~winter ~~Company~~season.

~~Capital~~As ~~expenditures~~of ~~are~~December ~~funded~~31, by2021, ~~both~~we ~~operating~~ believe that cash ~~and~~flow from ~~new~~operating ~~debt.~~activities Inand ~~fiscal~~borrowings ~~2021~~under toour ~~date,~~lines ~~the~~of ~~Company~~credit ~~has~~will ~~spent~~be ~~approximately~~sufficient ~~$7.0~~to ~~million~~satisfy onour ~~projects~~working capital and ~~safety-related~~debt ~~infrastructure~~service ~~improvements.~~requirements ~~This,~~over inthe ~~conjunction~~next ~~with~~twelve ~~our~~months. ~~growth~~We ~~projects,~~believe ~~creates~~new ~~liquidity~~debt ~~pressure~~will onbe ~~the~~required ~~Holding~~to ~~Company.~~satisfy Weour ~~anticipate~~capital ~~that~~expenditures and to finance our ~~aggressive~~internal ~~capital~~growth ~~construction~~needs ~~program~~for ~~will~~the ~~continue~~next totwelve ~~require~~months. ~~the~~We ~~Holding~~are ~~Company~~confident towe ~~raise~~can ~~new~~finance ~~debt~~them ~~and/or~~with ~~equity~~our current lenders.

~~Cash~~Off ~~flows~~Balance ~~from financing activities of the Company~~Sheet consist of long-term borrowings, repayment of long-term debt, net borrowings and repayments under our lines-of-credit, and quarterly dividend payments. For the Gas Company’s operations, it has an $8.0 million revolving line of credit with M&T Bank. Interest is a variable rate determined by the Gas Company’s funded debt to EBITDA ratio calculated ninety days after the end of each quarter added to the daily LIBOR rate with no additional collateral or covenants beyond those included in the M&T Bank term notes. The amount outstanding under this line as of June 30, 2021 was $5.5 million with an interest rate of 3.10%.Arrangements

~~Pike~~We ~~has~~have a $2.0 million revolving line of credit with M&T Bank. Interest is a variable rate determined by Pike’s funded debt to EBITDA ratio calculated ninety days after the end of each quarter added to the daily LIBOR rate with no ~~additional~~off-balance ~~collateral~~sheet ~~or covenants beyond those included in the M&T Bank term notes~~arrangements. ~~The amount outstanding under this line on June 30, 2021 was approximately $1.8 million with an interest rate of 2.87%.~~

~~Leatherstocking has a $1.5 million revolving line~~Critical ofAccounting ~~credit~~Policies with Wayne Bank. Interest on the line of credit is the prime rate (3.25% at June 30, 2021). The line of credit is for an indefinite period, is guaranteed by Leatherstocking Pipeline, and is secured by Leatherstocking Gas and Leatherstocking Pipeline assets. The amount outstanding under this line on June 30, 2021 was approximately $1.4 million.

~~The~~Our ~~Company~~significant ~~was~~accounting policies are described in ~~compliance~~the ~~with~~notes ~~all~~to ofthe ~~its~~Consolidated ~~loan covenants~~Financial asStatements ofin ~~June~~the Holding Company’s Form 10-K for the year ended September 30, 2021, filed on December 17, 2021. There have been no significant changes in our accounting policies during Q1 FY 2022.

34 Executive Promotions

~~Table~~On October 19, 2021, the board of ~~Contents~~ directors of Corning Natural Gas Holding Corporation voted unanimously to promote the following:

~~During~~Charles ~~the~~A. ~~three months ended June 30~~Lenns, ~~2021, the Gas Company mainly withdrew gas~~ from ~~storage,~~Vice ~~had a balance of $789~~President,~~251~~ ~~worth~~Chief ~~of gas in storage. The volume in storage at June 30, 2021 was~~Financial ~~390~~Officer,~~336~~ ~~thousand~~Treasurer ~~cubic~~and ~~feet~~Secretary ~~(“Mcf”)~~to atSenior anVice ~~average price of $1.98 per Mcf. At June 23~~President, ~~2020,~~Chief ~~the~~Financial ~~Company~~Officer ~~had~~and a balance of $709,051 worth of gas in storage. The volume in storage at June 30, 2020 was 380,805 Mcf at an average price of $1.88 per Mcf. During the next quarter, the Gas Company expects to be injecting gas into storage to have sufficient gas to supply customers for the winter season.Treasurer;

AsMatthew ofJ. ~~June 30~~Cook, ~~2021, we believe that cash flow~~ from ~~operating~~ ~~activities~~Vice ~~and~~President ~~borrowings~~– ~~under our lines of credit will be sufficient to satisfy our working capital and debt service requirements~~Operations ~~over the next twelve months. We believe new debt will be required~~ to ~~satisfy~~Senior ~~our~~Vice ~~capital~~President ~~expenditures~~ and toChief ~~finance~~Operations ~~our internal growth needs for the next twelve months. We are confident we can finance them with our current lender.~~Officer;

~~Off~~Russell ~~Balance~~S. ~~Sheet~~Miller, from Vice President – Gas ~~Arrangements~~Supply and Marketing to Senior Vice President and Chief Information Officer; and

WeJulie ~~have~~A. noLewis ~~off~~to ~~balance~~Corporate ~~sheet arrangements~~Secretary.

~~Critical Accounting Policies~~ 29

~~Our~~Table ~~significant~~of accounting policies are described in the notes to the Consolidated Financial Statements in the Holding Company’s Form 10-K for the year ended September 30, 2020, filed on December 21, 2020. There have been no significant changes in our accounting policies during the three or nine months ended June 30, 2021.Contents

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of ~~June~~December 3031, 2021, the Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based upon the Company’s evaluation, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures are effective as of ~~June~~December 3031, 2021.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that was conducted during the last fiscal quarter for the Company, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings.

~~The~~In ~~Holding~~connection with our 2021 annual shareholders meeting, on April 22, 2021, we filed with the U.S. Securities and Exchange Commission a proxy statement including important information about our [proposed merger with Argo. On May 11, 2021, WeissLaw LLP filed a complaint on behalf of purported shareholder Richard Lawrence in the United States District Court for the Southern District of New York against the Company and ~~its~~our ~~subsidiaries~~board ~~have~~members, ~~lawsuits~~captioned Lawrence v. Corning Natural Gas Holding Corp. et. al., Case No. 1:21-cv-04232-AJN. The complaint alleged that our directors and ~~complaints~~officers ~~pending~~are ofconflicted in connection with the ~~type~~merger ~~incurred~~and that there are deficiencies in the ~~normal~~proxy ~~course~~statement relating to our financial forecasts and the summary of ~~business~~the opinion of our financial adviser Janney Montgomery Scott LLC that the merger is fair, from a financial perspective, to the holders of our common stock. On May 12, 2021, we received a letter from WeissLaw demanding that we correct the allege deficiencies in the proxy statement. The WeissLaw suit and demand letter were substantially identical to demand letters we received from two other law firms on behalf of purported shareholders of the Company. ~~expects~~These law firms regularly make shareholder demands in connection with pending merger transactions. We believe that ~~any~~the ~~potential~~disclosure ~~losses~~included ~~will~~in beour ~~covered~~proxy statement complied fully with applicable law and that the demand letters byand ~~insurance~~the Lawrence complaint are without merit. Nevertheless, ~~subject~~in December 2021, in order to ~~deductibles~~avoid the risk of delaying the consummation of the merger, and ~~will~~to ~~not~~minimize ~~have~~the costs, risks and uncertainties inherent in litigation, we, without admitting any liability or wrongdoing, made a ~~material~~payment ~~adverse~~to ~~impact~~each onof the ~~Company~~firms and the purported shareholders dropped their claims and the Lawrence suit was dismissed.

35 Item 1A. Risk Factors.

~~Table~~Please refer to risk factors listed under Item 1A – “Risk Factors” of ~~Contents~~ the Holding Company’s Form 10-K for the fiscal year ended September 30, 2021, for disclosure relating to certain risk factors applicable to the Company.

Item 1A2. ~~Risk~~Unregistered ~~Factors~~Sales of Equity Securities and Use of Proceeds.

Please refer to risk factors listed under Item 1A – “Risk Factors” of the Holding Company’s Form 10-K for the fiscal year ended September 30, 2020, for disclosure relating to certain risk factors applicable to the Company.None

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.~~30

~~None~~Table of Contents

Item 3.

Defaults Upon Senior Securities.

None

Item 4.

Mine Safety Disclosures.

Not applicable

Item 5.

Other Information.

None

Item 6.

Exhibits.

31.1**	Certification of the Chief Executive Officer and President pursuant to 17 CFR Section 240.13a-14
31.2**	Certification of the Chief Financial Officer and Treasurer pursuant to 17 CFR Section 240.13a-14
32.1**	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Corning Natural Gas Holding Corporation Quarterly Report on Form 10Q for the period ended December 31, 2021, formatted in XBRL (eXtensible Business Reporting Language):
	10-Q for the period ended June 30, 2021, formatted in XBRL (Extensible Business Reporting Language):
	(i) the Consolidated Balance Sheets at December 31, 2021 and September 30, 2021,
	(i) the Consolidated Balance Sheets at June 30, 2021 and September 30, 2020,
	(ii) the Consolidated Statements of Income for the three months ended December 31, 2021, and December 31,
	(ii) the Consolidated Statements of Income for the three and nine months ended June 30, 2021 and June 30, 2020,
	2020,
	(ii) the Consolidated Statements of Comprehensive Income for the three months and nine months
	(ii) the Consolidated Statements of Comprehensive Income for the three months ended December 31, 2021, and
	ended June 30, 2021 and June 30, 2020,
	December 31, 2020,
	(iv) the Consolidated Statements of Cash Flows for the nine months ended June 30, 2021 and June 30, 2020, and
	(iv) the Consolidated Statements of Cash Flows for the three months ended December 31, 2021,
	and December 31, 2020, and
	(v) related notes to the Consolidated Financial Statements
Filed herewith * Furnished herewith

** Filed herewith31

~~***~~Table ~~Furnished~~of ~~herewith~~Contents

36 SIGNATURES

~~Table~~Pursuant to the requirements of ~~Contents~~ the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SIGNATURES

	CORNING NATURAL GAS HOLDING CORPORATION
Date: February 11, 2022	By: /s/ Michael I. German
	Michael I. German, Chief Executive Officer and President
	(Principal Executive Officer)
Date: February 11, 2022	By: /s/ Charles A. Lenns
	Charles A. Lenns, Chief Financial Officer
	(Principal Financial and Accounting Officer)

~~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 thereunto duly authorized.~~32

	CORNING NATURAL GAS HOLDING CORPORATION
Date: August 11, 2021	By: /s/ Michael I. German
	Michael I. German, Chief Executive Officer and President
	(Principal Executive Officer)
Date: August 11, 2021	By: /s/ Charles A. Lenns
	Charles A. Lenns, Chief Financial Officer
	(Principal Financial and Accounting Officer)

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