CORNING NATURAL GAS CORP (Form: S-3, Received: 06/28/2012 06:02:43)

As filed with the Securities and Exchange Commission on June 27, 2012

Registration No. 333-

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-3

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

CORNING NATURAL GAS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

New York	4923	16-0397420
(State or other jurisdiction	(Primary Standard Industrial	(I.R.S. Employer
of incorporation or organization)	Classification Code)	Identification Number)

330 W. William St.

Corning, New York 14830

(607) 936-3755
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices )

Michael I. German

President and Chief Executive Officer

Corning Natural Gas Corporation

330 W. William St.

Corning, New York 14830

(607) 936-3755
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Agent for Service)

With a copy to:

Deborah J. McLean, Esq.

Nixon Peabody LLP

1100 Clinton Square

Rochester, New York 14604

(585) 263-1307

Facsimile: (866) 947-0724

-----------------------

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If the only securities being registered on this Form are being offered pursuant to divided or interest reinvestment plans, please check the following box: [ _ ]

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: [X]

If this Form is filed to register additional shares for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ _ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ _ ]

If this Form is a registration statement pursuant to General Instruction 1.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box: [ _ ]

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction 1.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box: [ _ ]

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

Large accelerated filer [ _ ]	Accelerated filer [ _ ]
Non-accelerated filer [ _ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered (1)	Amount to be registered	Proposed maximum offering price per share	Proposed maximum aggregate offering price	Amount of registration fee
Subscription Rights to Purchase Shares of Common Stock	260,000 Subscription Rights	(2)	(2)	$0.00 (2)
Common Stock, $5.00 par value per share	260,000 Shares	$15.75	$4,095,000.00(3)	$469.29(3)

This Registration Statement relates to (a) subscription rights to purchase 260,000 shares of the registrant's common stock, par value $5.00 per share, and (b) shares of registrant's common stock deliverable upon the exercise of the Subscription Rights.

The Subscription Rights are being issued for no consideration. Pursuant to Rule 457(g) under the Securities Act of 1933, as amended, no separate registration fee is payable.

Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), shall determine .

The information in this prospectus is not complete and may be changed. These securities may not be sold nor may offers to buy these securities be accepted prior to the time the registration statement filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE 27, 2012

PROSPECTUS

CORNING NATURAL GAS CORPORATION

SUBSCRIPTION RIGHTS TO PURCHASE UP TO

260,000 SHARES OF COMMON STOCK

260,000 SHARES OF COMMON STOCK

ISSUABLE UPON EXERCISE OF THE SUBSCRIPTION RIGHTS

We are offering to the holders of our common stock transferable subscription rights to purchase up to an aggregate of 260,000 shares of our common stock. Subscribing shareholders will be entitled to purchase one share of our common stock for each eight (8) current shares owned at a cash exercise price of $15.75 per share. This rights offering is being made to help fund capital expenditures, replacement of distribution mains and customer service lines, and growth in our existing service area and nearby areas, and costs of this offering. The subscription rights are granted to our shareholders without charge. Based on the 1,972,163 shares outstanding as of June20, 2012, we expect to issue subscription rights to purchase approximately 246,500 shares.

You will not be entitled to receive any subscription rights unless you are a shareholder of record as of 5:00p.m. New York City time on July2, 2012, which is the record date for this rights offering. Your subscription rights will expire if they are not exercised by 5:00 p.m., New York City time, on September 21, 2012, the expected expiration date of this rights offering. We, in our sole discretion, may extend the period for exercising the subscription rights. We will extend the duration of the rights offering as required by applicable law, and may choose to extend it if we decide to give investors more time to exercise their subscription rights in this rights offering. If we extend the time for exercising the subscription rights, we will not extend such time more than 30 days past the original expiration date. Subscription rights that are not exercised by the expiration date of the rights offering will expire and will have no value. You should carefully consider whether or not to exercise your subscription rights before the expiration date.

Shares of our common stock are traded over-the-counter and sales are reported on the OTC Bulletin Board (R) under the symbol "CNIG." The last reported sale price of our common stock on the OTC Bulletin Board (R) on June21, 2012 , was $16.50 per share, which may reflect inter-dealer prices without retail mark-up or mark-down or commission and may not necessarily represent actual transactions.

This is not an underwritten offering and there will be no underwriter's discounts or commissions. The subscription price and gross proceeds (before expenses) to Corning is $15.75 per share.

AN INVESTMENT IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING AT PAGE 10 IN THIS PROSPECTUS BEFORE EXERCISING YOUR SUBSCRIPTION RIGHTS.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The securities are not being offered in any jurisdiction where the offer is not permitted.

The date of this prospectus is [_______], 2012.

Table of Contents

ABOUT THIS PROSPECTUS	1
FORWARD-LOOKING STATEMENTS	1
SUMMARY	2
FREQUENTLY ASKED QUESTIONS ABOUT THE RIGHTS OFFERING	5
RISK FACTORS	10
ABOUT CORNING NATURAL GAS CORPORATION	14
DETERMINATION OF OFFERING PRICE	16
THE RIGHTS OFFERING	17
DESCRIPTION OF SECURITIES TO BE REGISTERED	25
SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSEQUENCES	26
PLAN OF DISTRIBUTION	29
LEGAL MATTERS	29
EXPERTS	29
OTHER INFORMATION WITH RESPECT TO THE COMPANY	29
MATERIAL CHANGES	30
WHERE YOU CAN FIND MORE INFORMATION	30
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES	31

Appendix A - Form of Instructions as to Use of Corning Subscription Rights Certificate	A-1
Appendix B - Form of Subscription Rights Certificate	B-1

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are making offers only to persons in jurisdictions where offers are permitted and this prospectus is not an offer to sell securities to, nor is it seeking an offer to buy securities from, any person in any jurisdiction where such offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement (which includes exhibits) that we have filed with the Securities and Exchange Commission, or the SEC, on Form S-3 covering the subscription rights we will distribute to shareholders of record on the record date, July 2, 2012, and the shares of common stock issuable upon exercise of those subscription rights at an exercise price of $15.75 per share. This prospectus does not contain all information contained in the registration statement, certain parts of which are omitted in accordance with the SEC's rules and regulations. Statements made in this prospectus as to the contents of any other document (including exhibits to the registration statement) are not necessarily complete. You should review the document itself for a thorough understanding of its contents. The registration statement and amendments thereto can be read and reviewed at the SEC's web site located at www.sec.gov or at the SEC's offices mentioned under the heading "Where You Can Find More Information" at page 30.

FORWARD-LOOKING STATEMENTS

This prospectus contains statements that are forward-looking, such as statements relating to future capital expenditures, financing sources and availability, business expansion and cost-saving efforts, and the effects of regulation and competition. The words "believe," "expect," "anticipate," "intend," "may," "plan," and similar expressions are intended to identify these statements. 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. These statements include but are not limited to statements under the captions "Questions and Answers About the Rights Offering," "Summary" and "Risk Factors," as well as all other sections in this prospectus and any information incorporated in this prospectus by reference. Factors that could cause actual results to differ materially from our management's expectations include, but are not limited to:

the effect of any interruption in our supply of natural gas or a substantial increase in the price of natural gas,
our ability to successfully negotiate new supply agreements for natural gas as they expire, on terms favorable to us, or at all,
the effect on our operations of weather conditions and conservation efforts by our customers,
the effect on our operations of any actions by the New York Public Service Commission,
the effect of any litigation, including litigation by shareholders and former executive officers,
the effect on our operations of unexpected changes in any other applicable legal or regulatory requirements,
the amount of natural gas produced and directed through our pipeline by producers,
our ability to obtain additional equity or debt financing to fund our capital expenditure plans and for general corporate purposes,
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,
our ability to effectively implement cost savings measures, [including avoidance of costly litigation,
our ability to retain the services of our senior executives and other key employees,
our vulnerability to adverse general economic and industry conditions on our major customers and customers generally,
the effect of any leaks in our transportation and delivery pipelines, and
competition for gas supply and transportation from other sources and pipelines.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events.

Page 1.

SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that is important to you. This prospectus includes information about our business and our financial and operating data. Before making an investment decision, we encourage you to read the entire prospectus carefully, including the risks discussed in the "Risk Factors" section beginning at page 10. We also encourage you to review our financial statements and the other information we provide in the reports and other documents that we file with the SEC as described under "Where You Can Find More Information" at page 30.

We use the terms "we," "us," "our," "the Company" and "Corning" in this prospectus to refer to Corning Natural Gas Corporation.

Our Company Overview

We are a public utility company headquartered in Corning, New York incorporated in 1904. Our primary business is a regulated natural gas distribution business with operations in New York.

We purchase, transport, distribute and sell natural gas to approximately 15,000 customers in the Corning, Hammondsport and Virgil, New York areas. We have over 400 miles of gas distribution and transmission pipelines in our service areas with a population of approximately 50,000. Our customer base includes residential, commercial, industrial and municipal customers in the Corning and Virgil, New York areas and gas utilities that serve the Bath and Elmira, New York areas.

At May 31, 2012 we provided service to approximately 11,300 residential customers, 840 small and large commercial customers and 2,600 aggregation customers. Our largest customers are Corning Incorporated, New York State Electric & Gas Corporation, and Bath Electric, Gas & Water Systems.

Our natural gas supply comes from third-party providers and from natural gas held in storage. We have entered into supply arrangements for natural gas through March31, 2013, and thereafter. We have contracted for storage capacity of approximately 736,000 decatherms, or Dth.

Our business is highly seasonal because a material portion of our total sales and delivery volumes is to customers whose usage varies depending upon temperature. Our present rate structure, however, includes both a weather normalization clause and a revenue decoupling mechanism that are designed to mitigate the effect of departures from normal temperatures on both our earnings and cost to our customers.

Our utility operations are subject to regulation by the New York Public Service Commission, or the New York Public Service Commission ("NYPSC"), as to rates, service area, adequacy of service and safety standards.

Recent Industry Trends

Since 2000 domestic energy markets have experienced significant price volatility. Rising natural gas prices early in the decade and new gas production technology resulted in a surge in supply-related investment that has increased domestic production, causing an increase in the supply of natural gas. Increasing supplies and price induced conservation have favorably impacted natural gas prices. Given the current environment, we expect that natural gas will maintain a favorable competitive position compared to other fossil fuels. Given natural gas' clean burning attributes, we believe environmental regulations may enhance this competitive outlook.

Page 2.

Our Operating and Growth Strategy

Experienced Management Team

Our executive management team and board of directors have over 130 years of collective experience in the utility industry.

Our principal executive offices are located at 330 West William Street, Corning, New York 14830, and our telephone number is 607-936-3755. Our web site is www.corninggas.com. The information available on our web site is not part of this prospectus or any other reports filed by us with the SEC.

The rights offering

We are distributing subscription rights to holders of our common stock, at no charge, at the rate of one right for each eight (8) shares of common stock owned as of the record date for this offering, July2, 2012. We are not distributing fractional rights (and will round fractions down). There is no minimum amount of proceeds required to complete the rights offering.

Basic subscription privilege

Each right entitles you to purchase one share of our common stock at the subscription price of $15.75 per share purchased.

Over-subscription privilege

If you fully exercise your basic subscription privilege, the over-subscription privilege entitles you to subscribe for additional shares of common stock at $15.75 per share. If there are not enough shares to satisfy all subscriptions made under the over-subscription privilege, we will allocate the available shares pro rata among the over-subscribing rights holders.

Expiration date and Extensions

5:00 p.m. New York City time, September 21, 2012, unless otherwise extended by us to a later date. We may, in our sole discretion, extend the time for exercising the subscription rights. If we extend the time for exercising the subscription rights, we will not extend such time more than 30 days past the original expiration date.

Procedure for exercising rights

You may exercise your basic subscription privilege and your over-subscription privilege by properly completing the rights certificate and forwarding it to the subscription agent with payment of the subscription price, including payment for all the shares you wish to purchase with both the basic subscription privilege and the over-subscription privilege. The subscription agent must actually receive the rights certificate and payment at or prior to the expiration of the rights offering, and any personal checks must be for good funds and clear the banking system by the expiration date. If you send rights certificates by mail, you are urged to use insured, registered mail.

Page 3.

Subscription agent

Registrar and Transfer Company, telephone number 1-800-368-5948, 10 Commerce Drive, Attn. Reorg/Exchange Department, Cranford, NJ 07016.

Use of proceeds

We will use the proceeds of this rights offering and cash flows from our existing operations for general business purposes, including capital expenditures, including replacement of distribution mains and customer service lines and fees and expenses related to this rights offering. We are negotiating with institutional lenders to obtain debt financing to supplement the proceeds of this offering. The debt financing is expected to be up the amount of the net equity raised in this offering. The rights offering does not have a minimum amount of proceeds.

Risk factors

Exercise of your subscription rights and purchase of shares of common stock involve risks common to other investments in equity securities as well as other risks particular to the Company. You should carefully read the section entitled "Risk Factors" beginning at page10 before you sell or exercise your rights.

Page 4.

FREQUENTLY ASKED QUESTIONS ABOUT THE RIGHTS OFFERING

Q. What is the rights offering?

A. The rights offering is a distribution to holders of our common stock, at no charge, of transferable subscription rights. We are distributing one right for each eight shares of common stock owned as of 5:00p.m. New York City time on July 2, 2012, the record date, for a total of subscription rights to acquire up to 260,000 shares of common stock (the exact number of shares issuable upon exercise of all outstanding rights may vary due to rounding). We will not distribute fractional rights or issue fractional shares. Each right is evidenced by a rights certificate.

Q. What is a subscription right?

A. Each full subscription right is a right to purchase on or before the expiration date, one share of our common stock at an exercise price of $15.75 per share. Each subscription right carries with it a basic subscription privilege and an over-subscription privilege.

Q. What is the basic subscription privilege?

A. The basic subscription privilege of each right entitles you to purchase one share of our common stock at the subscription price of $15.75 per share purchased.

Q. What is the over-subscription privilege?

A. We expect that some of our shareholders will not exercise all of their basic subscription privileges. By extending over-subscription privileges to our shareholders, we are providing shareholders that exercise all of their basic subscription privileges with the opportunity to purchase those shares of common stock that are not purchased by other shareholders through the exercise of their basic subscription privileges. If you fully exercise your basic subscription privilege, the over-subscription privilege entitles you to subscribe for additional shares of common stock at the same subscription price of $15.75 per share that applies to your basic subscription privilege. If the number of shares of common stock requested by all holders exercising the over-subscription privilege is less than the total number of shares available, then each person exercising the over-subscription privilege will receive the total number of shares requested. If there are not enough shares of common stock to satisfy all subscriptions made under the over-subscription privilege, we will allocate the available shares pro rata among the over-subscribing rights holders. "Pro rata" means in proportion to the number of shares of common stock that you and the other holders of subscription rights have subscribed for by exercising the over-subscription privileges. The subscription agent will return any excess payments by mail without interest or deduction promptly after the expiration of the rights offering.

Q. How long will my subscription right be valid?

A. You will be able to exercise your subscription rights only during a limited period. If you do not exercise your subscription rights before 5:00 p.m., New York City time, on September 21, 2012, your subscription rights will expire. We may, in our discretion, extend the rights offering until some later time. If we extend the time for exercising the subscription rights, we will not extend such time more than 30 days past the original expiration date.

Q. Why is Corning engaging in a rights offering?

A. The purpose of the rights offering is to raise funds for general business purposes, including to finance capital expenditures, including replacement of distribution mains and customer service lines, and to pay expenses and fees related to this rights offering. See "Use of Proceeds" at page 16. There is no minimum amount of proceeds required to complete the rights offering.

Q. How was the subscription price for the shares of common stock established?

Page 5.

A. Our board of directors determined the subscription price for the shares of common stock based on the information available to the board regarding our capital and other cash needs, the lack of an active trading market for our common stock, comparable market to book and price to earnings ratios for small gas utilities and other information. Our board of directors considered a number of factors in establishing the subscription price, including the historic and current market price of the common stock, our business prospects, our recent and anticipated operating results, general conditions in the securities markets, our need for capital, alternatives available to us for raising capital, the amount of proceeds desired, the pricing and expense of alternative and similar transactions, the liquidity of our common stock and the level of risk to our investors. Our board of directors makes no recommendation to you about whether you should exercise any of your subscription rights.

We did not seek or obtain any opinion of financial advisors or investment bankers in establishing the subscription price of the offering. The last reported sale price of our common stock on the OTC Bulletin Board ^(r) on June 21, 2012, was $16.50 per share, which may reflect inter-dealer prices without retail mark-up or mark-down or commission and may not necessarily represent actual transactions. You should not consider the subscription price to be an indication of our value or any assurance of future value.

Q. How do I exercise my subscription rights?

A. You may exercise your rights by properly completing and signing your rights certificate. You must deliver your rights certificate with full payment of the subscription price (including any amounts in respect of the over-subscription privilege) to the subscription agent on or prior to the expiration date. If you use the mail, we recommend that you use insured, registered mail, return receipt requested. If you cannot deliver your rights certificate to the subscription agent on time, you may follow the guaranteed delivery procedures described under "The Rights Offering - Guaranteed Delivery Procedures" at page 22. If you wish to exercise your over-subscription privilege, you must pay in full for: (1) the number of shares of common stock you purchase with your basic subscription privilege, and (2) the number of shares you wish to purchase with your over-subscription privilege. You may pay the subscription price by personal check or wire transfer. See "The Rights Offering - Method of Payment" at page 19. In order for you to timely exercise your rights, the subscription agent must actually receive good funds, in payment of the subscription price, before the expiration date. An uncertified personal check may take five business days or more to clear. Accordingly, if you pay the subscription price by personal check, you should make payment sufficiently in advance of the expiration date to ensure that your check actually clears and the payment is received before the expiration date.

Q. What should I do if I want to participate in the rights offering but my shares are held in the name of my broker, custodian bank or other nominee?

Page 6.

A. If you hold shares of our common stock through a broker, custodian bank or other nominee, we will ask your broker, custodian bank or other nominee to notify you of the rights offering. If you wish to exercise your rights, you will need to have your broker, custodian bank or other nominee act for you. To indicate your decision, you should complete and return to your broker, custodian bank or other nominee the form entitled "Beneficial Owner Election Form." You should receive this form from your broker, custodian bank or other nominee with the other rights offering materials. You should contact your broker, custodian bank or other nominee if you believe you are entitled to participate in the rights offering but you have not received this form.

Q. What if the market price per share of the common stock is less than the subscription price per share when I am deciding to exercise my subscription rights?

A. Consult your broker regarding the alternatives available to you. Depending on the market price of our common stock and the brokerage and other transaction costs, it may be more cost effective for you to purchase shares of our common stock over-the-counter rather than exercise your subscription rights.

Q. Will I be charged a sales commission or a fee by Corning if I exercise my subscription rights?

A. No. We will not charge a brokerage commission or a fee to rights holders for exercising their subscription rights. However, if you exercise your rights through a broker, custodian bank or nominee, you will be responsible for any fees charged by your broker, custodian bank or nominee. If you sell your subscription rights, you will be responsible for any commissions, taxes or brokers fees arising from any such sale.

Q. What is the board of directors' recommendation regarding the rights offering?

A. Our board of directors is not making any recommendation as to whether you should exercise or sell your subscription rights. You are urged to make your decision based on your own assessment of the rights offering and after considering all of the information in this prospectus, including the "Risk Factors" beginning at page 10.

Q. Is exercising my subscription rights risky?

A. Yes. The exercise of your rights involves risks. Exercising your subscription rights means buying additional shares of our common stock and should be considered as carefully as you would consider any other equity investment. Among other things, you should carefully consider the risks described under the heading "Risk Factors," beginning at page 10, before deciding to exercise or sell your subscription rights.

Q. May I transfer or sell my subscription rights if I do not want to purchase any shares of common stock?

A. Yes. The subscription rights will be evidenced by transferable subscription rights certificates. The subscription rights are transferable until the close of business on the last trading day preceding the expiration date of this rights offering. However, the subscription agent will only facilitate subdivisions or transfers of the actual subscription rights certificates until 5:00 p.m., New York City time, on September 18, 2012, three business days prior to the expiration date. You must deal directly with persons to whom you wish to transfer any subscription rights. We will not take any steps to facilitate trading and do not expect a market to develop in the trading of the subscription rights. Furthermore, we do not expect any transfers of subscription rights to be quoted on any inter-dealer quotation system or other national securities exchange. Therefore, we cannot assure you that you will be able to sell any of your subscription rights. See "The Rights Offering - Methods for Transferring and Selling Subscription Rights" at page 23.

Q. How may I sell my rights?

A. You may sell your subscription rights by contacting your broker or the institution through which you hold your shares of common stock.

Q. Am I required to subscribe in the rights offering?

A. No.

Page 7.

Q. What happens if I choose not to exercise my subscription rights?

A. If you do not exercise your subscription rights, the rights offering will not affect the number of shares of common stock you now own. However, if you choose not to exercise your subscription rights and other shareholders do, the percentage of our common stock that you own after the offering will decrease, and your voting and other rights will be diluted to the extent that other shareholders exercise their basic and over-subscription rights. Rights not exercised prior to the expiration of the rights offering will automatically expire.

Q. Are there limitations on exercising my subscription rights?

A. Under amendments to Section 70 of the NY Public Service Law enacted in 2009, certain holders of more than 10% of our common stock, including individuals and specified entities in addition to corporations, require the consent of the NYPSC to acquire additional voting securities of a gas company like the Company. At the request of the Company, the NYPSC issued a declaratory order on May 17, 2012 (Case No. 12-G-0049) providing that current or future shareholders owning more than a 10% ownership in the Company may purchase additional shares in an offering consistent with maintaining the proportional ownership interests in existence at the time of the offering without further NYPSC consent. Under this order, current holders of 10% or more of our common stock may subscribe in this offering (and participate in the over-subscription privilege) without further consent of the NYPSC. Please note that the NYPSC order does not affect reporting requirements applicable to holders of 5% or more, and the reporting and other requirements applicable to holders of 10% or more, of the Company's common stock under the federal securities laws, which continue to be required of such holders.

Q. How many shares will be outstanding after the rights offering?

A. Assuming that the rights offering is fully subscribed, approximately 2,218,683 shares of our common stock will be outstanding. The number of shares of our common stock outstanding is subject to any increases that may occur after the date of this prospectus as a result of the exercise, conversion or exchange of outstanding stock options and the dividend reinvestment program. We cannot predict how many of the subscription rights will actually be exercised.

Q. What happens if the rights offering is not fully subscribed after giving effect to the over-subscription privilege?

A. Any rights not exercised after giving effect to the over-subscription privilege will expire. If a significant number of the rights expire unexercised for any reason, we will have less money to undertake expansion and other projects. See "Use of Proceeds" and "Risk Factors - The rights offering does not have a minimum amount of proceeds."

Q. After I exercise my rights, can I change my mind and cancel my purchase?

A. No. Once you send in your rights certificate and payment you cannot revoke the exercise of your rights, even if you later learn information about us that you consider to be unfavorable and even if the market price of our common stock is below the $15.75 per share subscription price. You should not exercise your subscription rights unless you are certain that you wish to purchase shares of our common stock at a price of $15.75 per share. See "The Rights Offering - No Revocation" at page 23.

Q. What are the federal income tax consequences of exercising my subscription rights as a holder of common stock?

A. A holder of our common stock will not recognize income or loss for United States federal income tax purposes upon receipt or exercise of subscription rights in the rights offering. However, you should consult with your own financial or tax advisor. See "Summary of United States Federal Income Tax Consequences," beginning at page26.

Page 8.

Q. When will I receive my new shares?

A. If you purchase shares of our common stock through this rights offering, you will receive certificates representing the shares as soon as practicable after the expiration of the rights offering and after all pro-rata allocations and adjustments have been completed. We will not be able to calculate the number of shares to be issued to each exercising holder until 5:00 p.m., New York City time, on the third business day after the expiration date of this rights offering, which is the latest time by which subscription rights certificates may be delivered to the subscription agent under the guaranteed delivery procedures described under "The Rights Offering - Guaranteed Delivery Procedures" at page22. Subject to applicable state securities laws and regulations, we have the discretion to delay allocation and distribution of any shares you may elect to purchase by exercise of your basic or over-subscription privilege in order to comply with applicable state securities laws.

Q. Will the new shares initially trade over-the-counter and be treated like other shares?

A. Yes. Our common stock is traded over-the-counter and sales are reported on the OTC Bulletin Board ^(r) under the symbol "CNIG." On June 21, 2012, the last reported sales price of our common stock was $16.50 per share. You should note that prices quoted on the OTC Bulletin Board ^® , which may reflect inter-dealer prices without retail mark-up or mark-down or commission and may not necessarily represent actual transactions.

Q. Will Corning complete the rights offering if shareholders do not subscribe for a minimum number of shares of common stock?

A. We will complete this offering even if we do not receive subscriptions for any specific number of shares of our common stock. We are not obligated, prior to the completion of the rights offering, to inform you how many shares have been subscribed for, and we do not expect to announce publicly the results of the rights offering until after its completion.

Q. Are there any conditions to the rights offering?

A. We may terminate this rights offering, in whole or in part, if at any time before completion of this rights offering if there is any investigation, claim, litigation, petition, judgment, order, decree, injunction, statute, law or regulation entered, enacted, amended or held to be applicable to this rights offering that in the sole judgment of our board of directors would or might make this rights offering or its completion, whether in whole or in part, illegal or otherwise restrict or prohibit completion of this rights offering. In addition, this offering is contingent upon various regulatory notices, petitions or approvals. We may waive this and choose to proceed with this rights offering even if these events occur. If we terminate this rights offering, in whole or in part, all affected subscription rights will expire without value and all subscription payments received by the subscription agent will be returned promptly, without interest or deduction.

Q. Can Corning cancel this rights offering?

A. Yes. We may cancel this rights offering, in whole or in part, in our sole discretion at any time prior to the time this rights offering expires for any reason (including a change in the market price of our common stock). If we cancel this rights offering, any money received from subscribing shareholders will be refunded promptly, without interest or deduction. The completion of this offering is contingent on various regulatory notices or approvals.

Q. If the rights offering is not completed, will my subscription payment be refunded to me?

A. Yes. The subscription agent will hold all funds it receives in escrow until completion of the rights offering. If the rights offering is not completed, the subscription agent will return promptly, without interest or deduction, all subscription payments.

Q. What should I do if I have other questions?

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A. If you have questions or need assistance, please contact Registrar and Transfer Company, the subscription agent, at 1-800-368-5948. For a more complete description of the rights offering, see "The Rights Offering," beginning at page17.

RISK FACTORS

An investment in our common stock through exercise of any subscription rights involves significant risk. You should consider carefully, in addition to the other information contained in this prospectus, in our annual report on Form 10-K for the fiscal year ended September 30, 2011, and our other reports filed with the Securities and Exchange Commission, the following risk factors before making any decision.

Risks Related to Corning

Our cash flows from operations will not be sufficient to fund our [extraordinary] capital expenditures.

We do not generate sufficient cash flows from operations to meet all of our cash needs. As part of our 2012 rate order set by the New York Public Service Commission ("NYPSC"), we are required to make substantial capital expenditures to upgrade our distribution system. We also continue to have debt retirement obligations of approximately $1.5 million per year with a balloon payment on our M&T Bank debt of approximately $4.1 million due in October2013.

If an insufficient number of the subscription rights offered pursuant to this offering are exercised, we may not have sufficient funds to meet our cash needs and our inability to do so would have a material adverse effect on our business and results of operations.

We may require additional financing.

In order to fund our extraordinary capital expenditures, even if the subscription rights offered hereby are fully exercised, we may need to obtain additional equity or debt financing. We do not currently have commitments from institutional lenders to obtain debt financing to supplement the proceeds of this offering for 2012. We are in the process of negotiating such financing and securing commitments and would look to negotiate ongoing commitments for 2013 and 2014. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of debt would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. Additional financing may have unacceptable terms or may not be available at all; there is no guarantee we will be able to obtain debt financing. If we cannot raise additional capital on acceptable terms, we may not be able to finance the expansion and upgrading of our distribution system, and we may also be restricted in implementing our growth plans.

Our operations could be adversely affected by fluctuations in the price of natural gas.

Prices for natural gas are subject to volatile fluctuations in response to changes in supply and other market conditions. While these costs are usually passed on to customers pursuant to natural gas adjustment clauses and therefore do not pose a direct risk to earnings, we are unable to predict what effect a sharp increase in natural gas prices may have on our customers' energy consumption or ability to pay. Higher prices to customers can lead to higher bad debt expense and customer conservation. Higher prices may also have an adverse effect on our cash flow as typically we are required to pay for our natural gas prior to receiving payments for the natural gas from our customers.

Operational issues beyond our control could have an adverse effect on our business.

Our ability to provide natural gas and to fully utilize our pipelines and storage capacities depends both on our own operations and facilities and that of third parties, including local and nearby gas producers and natural gas pipeline operators from whom we receive our natural gas supply. Reductions in production or decisions by gas producers to reduce the flow of gas through our pipelines, or the loss of use or destruction of our facilities or the facilities of third parties due to extreme weather conditions, breakdowns, war, acts of terrorism or other occurrences could greatly reduce potential earnings and cash flows and increase our costs of repairs and replacement of assets. Although we carry property insurance to

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protect our assets and have regulatory agreements that provide for the recovery of losses for certain uncontrollable incidents, our losses may not be fully recoverable through insurance or customer rates. We have limited protection against changes in the flow of gas through our pipelines by gas producers.

Significantly warmer than normal weather conditions may affect the sale of natural gas and adversely impact our financial position and the results of our operations.

The demand for natural gas is directly affected by weather conditions in the Northeast. Significantly warmer than normal weather conditions in our service areas could greatly reduce our earnings and cash flows as a result of lower gas sales levels. Although we mitigate the risk of warmer winter weather through the weather normalization and revenue decoupling clauses in our tariffs, we may not always be able to fully recover all lost revenues.

There are inherent risks associated with storing and transporting natural gas, which could cause us to incur significant financial losses.

There are inherent hazards and operation risks in gas distribution activities, such as leaks, accidental explosions and mechanical problems that could cause substantial financial losses. These risks could, if they occur, result in the loss of human life, significant damage to property, environmental pollution, impairment of operations and substantial losses to us. The location of our pipelines near populated areas, including residential areas, commercial business centers and industrial sites, could increase the level of damages resulting from these risks. These activities may subject us to litigation and administrative proceedings that could result in substantial monetary judgments, fines or penalties against us. To the extent that the occurrence of any of these events is not fully covered by insurance, they could adversely affect our financial position and results of operations.

Changes in regional economic conditions could reduce the demand for natural gas.

Our business follows the economic cycle of the customers in our service regions: Corning, Bath, Virgil, and Hammondsport, New York. A falling, slow or sluggish economy that would reduce the demand for natural gas in the areas in which we are doing business by forcing temporary plant shutdowns, closing operations or slow economic growth would reduce our earnings potential.

Many of our commercial and industrial customers use natural gas in the production of their products. During economic downturns, these customers may see a decrease in demand for their products, which in turn may lead to a decrease in the amount of natural gas they require for production.

During any economic slowdown there is typically an increase in individual and corporate customer bankruptcies. An increase in customer bankruptcies would increase our bad debt expenses and reduce our earnings cash flows.

Our earnings may decrease in the event of adverse regulatory actions.

Our operations are subject to the jurisdiction of the NYPSC. The NYPSC approves the rates that we may charge to our customers. If we are required in a rate proceeding to reduce the rates we charge our customers, or if we are unable to obtain approval for rate relief from the NYPSC, particularly when necessary to cover increased costs, including costs that may be incurred in connection with mandated infrastructure improvements, our earnings may decrease.

A major customer has complained to the NYPSC that we owe it a refund for overbilling.

In written testimony filed with the NYPSC on July 11, 2011, a major customer claimed that, due to a meter error, we overbilled it over several years and owe a refund of approximately $345,800. We have contested that claim, but if the NYPSC rules against us, we may have to refund all or a portion of that amount.

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Default by a major customer on its gas bill could adversely affect our earnings.

A large commercial customer's account payable to us is in arrears. While we have a reserve for bad debts, a default by this, or another, major customer could adversely affect our earnings.

Our success depends in large part upon the continued services of a number of significant employees, the loss of which could adversely affect our business, financial condition and results of operation.

Our success depends in large part upon the continued services of our senior executives and other key employees. Although we have entered into an employment agreement with Michael I. German, our president and chief executive officer, Mr. German, and other significant employees who have not entered into employment agreements, may terminate their employment at any time. The loss of the services of any significant employee could have a material adverse effect on our business.

Concentration of share ownership among our largest shareholders may prevent other shareholders from influencing significant corporate decisions.

Our five largest shareholders own approximately two-thirds of the Company. This concentration of ownership could be disadvantageous to other shareholders with differing interests from these shareholders.

The Company's profitability may be adversely affected by increased competition.

We are in a geographical area with a number of interstate pipelines and local production sources. If a major customer decided to connect directly to either an interstate pipeline or a local producer, our earnings and revenues would decrease.

Our profitability and cash flow may be negatively impacted by offers to acquire the Company.

Offers made to acquire the Company would divert management attention and could be costly to respond to. For example, an unsolicited tender offer for the Company's common stock could negatively affect our relationship with our institutional lenders as well as our relations with the NYPSC and other agencies.

We may be constrained by the NYPSC on how we fund and staff our Leatherstocking Joint Ventures.

The current NYPSC financing order limits funds raised in new debt and equity offerings to be used in our regulated New York franchises. Corning filed a petition with the NYPSC on March 26, 2012 to form a holding company. We cannot predict when the petition will be acted upon or whether there will be restrictions in the use of funds or personnel in unregulated subsidiaries included in the final NYPSC order. If restrictions are included, they could limit the growth of our Leatherstocking Pipeline Company LLC and Leatherstocking Gas Company LLC joint ventures (which we refer to as our Leatherstocking Joint Ventures). If the NYPSC does not act upon or denies the petition, there would be limited resources to fund our Leatherstocking Joint Ventures.

Our Leatherstocking Joint Ventures May Be a Financial Burden

A new gas utility such as our Leatherstocking Gas Company has a start-up period when it requires significant cash for capital projects when it does not generate earnings. Our Leatherstocking Pipeline Company requires capital for laying pipeline. We have agreed to contribute to the capital and operating requirements of both Leatherstocking Gas Company and Leatherstocking Pipeline Company proportionately to our holdings, currently 50%. The contributions required reduce our cash available for other uses, including working capital, capital expenditures, debt repayment and dividends.

Risks Related to the Rights Offering

The subscription price determined for this offering is not an indication of our determination of the value of our common stock or of the Company as a whole.

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The subscription price was set by our board of directors at $15.75 per share of common stock. Our board of directors considered a number of factors in establishing the subscription price, including the historic and current market price of the common stock, our business prospects, our recent and anticipated operating results, general conditions in the securities markets, financial parameters for similar companies, our need for capital, alternatives available to us for raising capital, the amount of proceeds desired, the pricing of similar transactions, the liquidity of our common stock and the level of risk to our investors.

The subscription price does not necessarily bear any relationship to the results of our past operations, cash flows, net income, or financial condition, the book value of our assets, or any other established criteria for value, nor does the trading history of our common stock accurately predict its future market performance. Because of the manner in which we have established the subscription price, the trading price of our common stock may be below the subscription price even at the closing of the rights offering. On June 21, 2012, the last reported sales price for our common stock on the OTC Bulletin Board ^(r) was $16.50 per share, which may reflect inter-dealer prices without retail mark-up or mark-down or commission and may not necessarily represent actual transactions. You should not consider the subscription price to be an indication of our value or any assurance of future value.

Once you exercise your subscription rights, you may not revoke the exercise even if you no longer desire to invest in us, and you could be committed to buying shares above the current market price, even if we decide to extend the expiration date of the subscription period.

Even if circumstances arise after you have exercised your subscription rights that eliminate your interest in purchasing shares of our common stock, including a decline in the public trading market price of our common stock before the subscription rights expire, you will be required to purchase the shares for which you subscribed.

We may, in our discretion, extend the expiration date of the subscription period. If you exercise your subscription rights and, afterwards, the public trading market price of our common stock decreases below the subscription price - including during any potential extension of time -- you may suffer a loss on your investment upon the exercise of rights to acquire the shares. If we extend the time for exercising the subscription rights, we will not extend such time more than 30 days past the original expiration date.

You may have to wait to resell the shares you purchase in the rights offering.

Until certificates are delivered, you may not be able to sell the shares of common stock that you have purchased in the rights offering. This means that you may have to wait until you (or your broker or other nominee) have received stock certificates. We will endeavor to prepare and issue the appropriate certificates as soon as practicable after the expiration of the offering. However, we cannot assure you that the market price of our common stock purchased pursuant to the exercise of rights will not decline below the subscription price before we are able to deliver your certificates. For shares purchased pursuant to the over-subscription privilege, delivery of certificates will occur as soon as practicable after all prorations and adjustments contemplated by the terms of the offering have been effected.

If you pay the subscription price by personal check, your check may not clear in sufficient time to enable you to purchase common stock in this rights offering.

Any personal check used to pay for shares of common stock to be issued in this rights offering must clear prior to the expiration date of the offering, and the clearing process may require five or more business days. If you exercise your subscription rights, in whole or in part, and choose to pay by personal check and your check has not cleared prior to the expiration date of this rights offering, you will not have satisfied the conditions to exercise your subscription rights, you will not receive the shares you attempted to purchase, and you will lose the value of your subscription rights.

You will not receive interest on subscription funds, including any funds ultimately returned to you.

You will not earn any interest on your subscription funds while they are being held by the subscription agent pending the closing of this rights offering. In addition, if we cancel the rights offering, or if you exercise your oversubscription

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privilege and are not allocated all of the shares of common stock for which you over-subscribe, neither we nor the subscription agent will have any obligation with respect to the subscription rights except to return, without interest, any subscription payments to you.

The rights offering does not have a minimum amount of proceeds. No shareholder is required to exercise their subscription rights or over-subscription privilege, so fewer than all of the subscription rights may be exercised and we may need more capital to finance our planned capital expenditures.

There can be no assurance that any shareholders will exercise their subscription rights. There is no minimum amount of proceeds required to complete the rights offering. If you exercise the basic subscription privilege or the over-subscription privilege, but we do not raise the desired amount of capital in this rights offering, you may be investing in a company that continues to require additional capital to meet the capital needs discussed under the heading "Use of Proceeds" at page16.

ABOUT CORNING NATURAL GAS CORPORATION

Overview

We are a public utility company headquartered in Corning, New York incorporated in 1904. Our primary business is a regulated natural gas distribution business with operations in New York. Through our 50% interest in Leatherstocking Gas we are attempting to build a gas distribution network in Pennsylvania and in Upstate New York.

We purchase, transport, distribute and sell natural gas to approximately 15,000 customers in the Corning, Hammondsport and Virgil, New York areas. We have over 400 miles of gas distribution and transmission pipelines in our service areas with a population of approximately 50,000. Our customer base includes residential, commercial, industrial and municipal customers in the Southern Tier area of New York and gas utilities that service the Bath area and Elmira, New York.

Our natural gas supply comes from third-party providers and from natural gas held in storage. We have entered into an asset management agreement for our natural gas supply with ConocoPhillips through March31, 2013.

Our business is seasonal because a material portion of our total sales and delivery volumes is to customers whose usage varies depending upon temperature. Our present rate structure, however, includes weather normalization and revenue decoupling clauses, which are designed to mitigate the effect of departures from normal temperatures on both our earnings and cost to our customers.

Our utility operations are subject to regulation by the New York Public Service Commission, or the NYPSC, as to rates, service area, adequacy of service and safety standards.

Recent Industry Trends

Since 2000, domestic energy markets have experienced significant price volatility. Natural gas markets have been particularly volatile, principally due to weather and changes in supply availability. Rising natural gas prices and the development of new technologies (specifically hydraulic fracturing) have resulted in a surge in supply-related investment that has increased domestic production. Increasing supplies and price induced conservation have favorably impacted natural gas prices. Given the current environment, we expect that natural gas will maintain a favorable competitive position compared to other fossil fuels. Given natural gas's clean burning attributes, we believe environmental regulations may enhance this competitive outlook.

Our Operating and Growth Strategy

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We intend to enhance shareholder value through revenue growth and reduction of our operating costs. As a gas utility, our earnings are primarily determined by a rate of return set by the NYPSC on the investments in our facilities and equipment ( i.e. , both rate increases and increased load) to ensure service to our customers. Over the next several years, we intend to make significant capital investments to ensure the safety and reliability of our gas network. Based on these capital investments, we anticipate that we will increase our rate base. In addition, we have identified growth opportunities that we believe will contribute to our revenues, earnings and rate base, including growth in our existing service territory and expansion into new areas. We have also identified and are developing opportunities for increased connections with local and nearby production sources. We have obtained required tariffs from the Federal Energy Regulatory Commission (FERC) to transport gas from the gas producers exploiting the Marcellus shale reserves in northern Pennsylvania. The Company has entered into agreements with a producer for transport of gas in the Company's existing pipelines from Pennsylvania to its system in New York. The completion of our compressor station and certain pipeline upgrades have allowed us to transport additional quantities of Marcellus shale gas into an interstate pipeline. In addition, we have formed a joint venture, Leatherstocking Gas, to build new distribution systems in the Southern Tier of New York and the Northern Tier of Pennsylvania.

Experienced Management Team

Our executive management team and board of directors have over 130 years of collective experience in the utility industry.

Recent Developments

Investment in Leatherstocking Joint Ventures

The Company has formed two new subsidiaries: Leatherstocking Gas Company, LLC and Leatherstocking Pipeline Company, LLC. These subsidiaries were created for the purpose of providing natural gas service to communities in New York and Pennsylvania that were previously too remote from gas supply to be served. The subsidiaries are 50/50 joint ventures between the Company and Mirabito Regulated Industries ("MRI"). Mirabito Holding Incorporated ("MHI"), a sister company of MRI, holds approximately 8% of our outstanding common stock and two members of our Board of Directors are owners and/or board members of MHI. Leatherstocking Gas Company has applied for approximately fifteen franchises in Pennsylvania and has been granted four franchises by towns and villages in New York State. Leatherstocking Pipeline will begin construction in Pennsylvania in 2012. Leatherstocking Gas Company with more significant franchise development in both Pennsylvania and New York in the 2013 to 2016 period.

Rate Case

On April 20, 2012 the NYPSC issued a multi-year order in the Company's rate case (Case 11-G-0281). Under the rate increases authorized by the order, revenue will increase $944,310 in the first year (beginning May 1, 2012); $899,674 in year two; and $323, 591 in year three, for a cumulative revenue increase of $4,955,869 over the three year period. The order also provides us with the opportunity to earn $545,284 from local production before sharing, a 118% increase from the $250,000 allowed previously. The order also requires the Company to complete certain safety and reliability projects to enhance its existing infrastructure. We anticipate these projects will require in excess of $4,000,000 per year to complete.

Financing Order

On May 17, 2012, the NYPSC issued a final order on the Company's financing petition (Case 12-G-0049). The order authorized the Company to issue up to $9,000,000 of equity through December 31, 2016 and up to $9,000,000 of long-term debt, for an aggregate amount of $18,000,000. The proceeds from the authorized issuance may only be used to fund our regulated activities and not either of our Leatherstocking joint venture companies. The order also approved our request to allow

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current and future shareholders holding more than a 10% ownership in the Company under the financing petition to purchase additional shares, provided the additional shares are offered consistent with maintaining the proportional ownership interests in existence at the time of the offering. The approved purpose for the new financing is for the construction or improvement of facilities and improvement or maintenance of our service within New York State.

Petition to Form Holding Company

On March 26, 2012, we filed a petition with NYPSC for authority to form a holding company (Case 12-G-0141). The petition sought approval to establish a holding company structure under which one or more regulated companies and one or more unregulated companies, including our Leatherstocking joint ventures, may operate. The Company believes that a holding company structure would best facilitate both the management of its Leatherstocking joint ventures and future financing. The NYPSC has taken no action on the petition.

New Debt Currently Under Negotiation

In order to fund our extraordinary capital expenditures, the Company is currently in negotiations with two institutional lenders to obtain debt financing to supplement the proceeds of this offering for 2012. We will also look to negotiate ongoing commitments for 2013 and 2014. Financial institutions with whom we have been negotiating are also requiring, as a condition of their financing commitments, that we finance new capital projects with 50% long-term debt and 50% equity.

USE OF PROCEEDS

Although we have registered 260,000 shares of common stock for sale under this registration rights offering, as of June 20, 2012 we have outstanding 1,972,163 shares of common stock which, at a one-for-eight distribution rate would result in our issuing subscription rights to purchase 246,520 shares of common stock. If all of those shares were subscribed for prior to the expiration date, we will receive net proceeds (after offering expenses estimated at $50,000) of $3,882,690. If only 123,260 shares are purchased, we will receive net proceeds of $1,941,345. It is not possible to estimate the number of shares which will be purchased in this subscription rights offering. We intend to use the net proceeds for general corporate purposes, including the pine line replacement and system reliability capital projects required under our NYPSC rate order. As described above, the required capital projects are expected to cost approximately $4,000,000 a year and we are seeking additional debt financing to supplement the proceeds of this offering. We expect that any new financing secured would require that each $1.00 of advances be matched by $1.00 of equity capital. If we are unable to secure sufficient proceeds of this offering and matching debt financing, we may need to seek alternate equity or debt financing.

DETERMINATION OF OFFERING PRICE

Our board of directors determined the subscription price for the shares of common stock based on the information available to the board regarding our capital and other cash needs, the lack of an active trading market our common stock and other matters. Our board of directors considered a number of factors in establishing the subscription price, including the historic and then current market price of our common stock, our business prospects, our recent and anticipated operating results, general conditions in the securities markets, our need for capital, alternatives available to us for raising capital, the amount of proceeds desired, the pricing of similar transactions, the liquidity of our common stock and the level of risk to our investors. Our board of directors makes no recommendation to you about whether you should exercise any of your subscription rights.

We did not seek or obtain any opinion of financial advisors or investment bankers in establishing the subscription price of the offering. On June 21, 2012, the last reported sales price for our common stock on the OTC Bulletin Board(r)was $16.50 per share. You should not consider the subscription price to be an indication of our value or any assurance of future value.

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THE RIGHTS OFFERING

Background of the Rights Offering

In approving this rights offering, our board of directors carefully evaluated our need for additional capital and financial flexibility. The board also considered alternative capital raising methods that are available to us and analyzed, among other things, the costs and expenses associated with such methods. In conducting its analysis, the board also considered the effect on the ownership percentage of the current holders of our common stock caused by the rights offering, the pro-rata nature of a rights offering to our shareholders, the market price of our common stock, and general conditions of the securities markets.

After weighing the factors discussed above and the effect of the rights offering of generating approximately $3.9 million in gross proceeds (before expenses), assuming that all of the shares of common stock underlying the subscription rights are sold, as additional capital for us, we believe that the rights offering is the best alternative to raise capital and in the best interests of Corning and our shareholders. We believe that the rights offering will strengthen our financial condition through generating additional cash, reducing certain current outstanding debt, and increasing our shareholders' equity. However, our board of directors is not making any recommendation as to whether you should exercise your subscription rights.

We will distribute to each holder of record of our common stock on the record date, at no charge, one transferable subscription right for each eight shares of our common stock owned. The record date for this rights offering is 5:00 p.m., New York City time, on July 2, 2012. The exact number of subscription rights will vary, since we will round down to the nearest whole share any fractional amounts. The subscription rights will be evidenced by rights certificates. Each subscription right will allow you to purchase one share of our common stock at a subscription price of $15.75 per share. If you elect to exercise your basic subscription privilege in full, you may also subscribe, at the subscription price, for additional shares of our common stock pursuant to your over-subscription privilege to the extent that other rights holders do not exercise their basic subscription privileges in full. If a sufficient number of shares of common stock are unavailable to fully satisfy the over-subscription privilege requests, the available shares will be sold pro rata among the holders of subscription rights who exercised their over-subscription privilege based on the number of shares each subscription rights holder subscribed for under the basic subscription privilege.

If you hold your shares in a brokerage account or through a dealer or other nominee, please see the information included below the heading "- Instructions to Beneficial Owners" at page21.

No Fractional Rights

We will not issue fractional subscription rights or cash in lieu of fractional subscription rights. You may request that the subscription agent divide your subscription rights certificate into transferable parts, for instance, if you are the record holder for a number of beneficial holders of our common stock. However, the subscription agent will not divide your subscription rights certificate so that you would receive any fractional subscription rights. The subscription agent will only facilitate subdivisions or transfers of subscription rights certificates until 5:00 p.m., New York City time, on September 18, 2012, three business days prior to the expiration date.

Expiration of the Rights Offering and Extensions

You may exercise your subscription rights at any time before 5:00 p.m., New York City time, on September 21, 2012, the expiration date for this rights offering. We may, in our sole discretion, extend the time for exercising the subscription rights.

We will extend the duration of this rights offering as required by applicable law, and we may choose to extend it if we decide to give investors more time to exercise their subscription rights in this rights offering. We may extend the expiration date of this rights offering by giving oral or written notice to the subscription agent on or before the scheduled expiration date. If we elect to extend the expiration of this rights offering, we will issue a press release announcing such extension no later than

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9:00 a.m., New York City time, on the next business day after the most recently announced expiration date. If we extend the time for exercising the subscription rights, we will not extend such time more than 30 days past the original expiration date.

If you do not exercise your subscription rights before the expiration date of this rights offering, your unexercised subscription rights will be null and void and will have no value. We will not be obligated to honor your exercise of subscription rights if the subscription agent receives the documents relating to your exercise after this rights offering expires, regardless of when you transmitted the documents, except if you have timely transmitted the documents under the guaranteed delivery procedures described below.

Subscription Privileges

Your subscription rights entitle you to a basic subscription privilege and an over-subscription privilege.

Basic Subscription Privilege

With your basic subscription privilege, you may purchase one share of our common stock per subscription right, upon delivery of the required documents and payment of the subscription price of $15.75 per share of common stock, before the expiration of the rights offering. You are not required to exercise all of your subscription rights unless you wish to purchase shares under your over-subscription privilege. We will deliver certificates representing shares of common stock purchased with the basic subscription privilege as soon as practicable after this rights offering has expired.

Over-Subscription Privilege

In addition to your basic subscription privilege, you may also subscribe for additional share of common stock, upon delivery of the required documents and payment of the subscription price of $15.75 per share of common stock, before the expiration of this rights offering. You may only exercise your over-subscription privilege if you exercise your basic subscription privilege in full. If you wish to exercise your over-subscription privilege, you must submit payment in full for the number of shares of common stock you purchase with your basic subscription privilege and the number of shares you wish to purchase with your over-subscription privilege.

The number of shares of common stock that will be available for sale pursuant to the over-subscription privilege will be equal to the number of shares for which holders have not exercised their basic subscription privileges:

If the number of shares of common stock requested by all holders exercising the over-subscription privilege is less than the total number of shares available, then each person exercising the over-subscription privilege will receive the total number of shares requested.
If there are not enough shares of common stock to satisfy all subscriptions made under the over-subscription privilege, we will allocate the available shares pro rata among the over-subscribing rights holders. "Pro rata" means in proportion to the number of shares of common stock that you and the other holders of subscription rights have subscribed for exercising the over-subscription privileges.

You may exercise your over-subscription privilege only if you exercise your basic subscription privilege in full. To determine if you have fully exercised your basic subscription privilege, we will consider only the basic subscription privileges held by you in the same capacity. For example, suppose that you were granted subscription rights for shares of our common stock that you own individually and shares of our common stock that you own collectively with your spouse. If you wish to exercise your over-subscription privilege with respect to the subscription rights you own individually, but not with respect to the subscription rights you own collectively with your spouse, you only need to exercise fully your basic subscription privilege with respect to the subscription rights you own individually, and you do not have to subscribe for any shares of our common stock under the basic subscription privilege owned with your spouse to exercise your individual over-subscription privilege. When you complete the portion of your subscription rights certificate to exercise your over-subscription privilege, you will be representing and certifying that you have fully exercised your subscription privileges as to shares of our common stock that you hold in that capacity. You must exercise your over-subscription privilege at the same time you exercise your basic subscription privilege in full.

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If you exercise your over-subscription privilege and are allocated fewer than all of the shares of common stock for which you wish to subscribe, your excess payment for shares that are not allocated to you will be returned to you by mail, without interest or deduction, as soon as practicable after the expiration date of this rights offering. We will deliver certificates representing shares of common stock purchased with the over-subscription privilege as soon as practicable after this rights offering has expired and after all pro rata allocations and adjustments have been completed.

Conditions and Termination

We may terminate this rights offering, in whole or in part, if at any time before completion of the offering if there is any investigation, claim, litigation, petition, judgment, order, decree, injunction, statute, law or regulation entered, enacted, amended or held to be applicable to this rights offering that in the sole judgment of our board of directors would or might make the offering or its completion, whether in whole or in part, illegal or otherwise restrict or prohibit completion of this offering. In addition, this offering is contingent upon effectiveness of the registration statement of which this prospectus forms a portion, various regulatory notices, petitions or approvals. We may waive this condition and choose to proceed with the offering even if these events occur. If we terminate the offering, in whole or in part, we will as promptly as practicable issue a press release notifying shareholders of the termination and all affected subscription rights will expire without value and all subscription payments received by the subscription agent will be returned promptly, without interest or deduction.

Cancellation of the Rights Offering

Our board of directors may cancel this rights offering, in whole or in part, in its sole discretion at any time prior to the time this rights offering expires for any reason. Relevant factors in deciding to cancel the rights offering would include a change in the market price of our common stock, [the level of participation by our shareholders and the aggregate subscriptions we receive,] changes in our business and capital plans, and the availability of other sources of funding including our ability to obtain debt financing on terms we deem favorable. If we cancel this rights offering, we will as promptly as practicable issue a press release notifying shareholders of the cancellation and any funds you paid to the subscription agent will be promptly refunded, without interest or deduction.

Method of Subscription; Exercise of Rights

You may exercise your subscription rights by delivering the following to the subscription agent, at or prior to 5:00 p.m., New York City time, on September 21, 2012, the expiration date of this rights offering (or, if we elect to extend the expiration date by up to 30 days, such extended expiration date):

your properly completed and executed subscription rights certificate with any required signature guarantees or other supplemental documentation, and
your full subscription price payment for each share of common stock subscribed for under your subscription privileges, including each share subscribed for under both your basic subscription privilege and your over-subscription privilege.

If you are a beneficial owner of shares of our common stock whose shares are registered in the name of a broker, custodian bank or other nominee, you should instruct your broker, custodian bank or other nominee to exercise your rights and deliver all documents and payment on your behalf prior to 5:00 p.m. New York City time on the expiration date of this rights offering.

Your subscription rights will not be considered exercised unless the subscription agent receives from you, your broker, custodian or nominee, as the case may be, all of the required documents and your full subscription price payment in cleared funds prior to the expiration of this rights offering.

Method of Payment

Your payment of the subscription price must be made in U.S. dollars for the full number of shares of common stock for which you are subscribing by personal check drawn upon a U.S. bank payable to the subscription agent or wire transfer of immediately available funds, to the subscription account maintained by the subscription rights agent at TD Bank, 6000 Atrium Way, Mt. Laurel, NJ 08054; ABA No. 031-201-360, Account Name: Registrar and Transfer Company, as Rights Offering Agent, Account No. xxx-xxx-xxx-5977.

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Receipt of Payment

Your payment will be considered received by the subscription agent only upon:

clearance of any personal check, or
receipt of collected funds in the subscription account designated above.

Clearance of Personal Checks

If you are paying by personal check, please note that personal checks may take at least five business days to clear. If you wish to pay the subscription price by personal check, we urge you to make payment sufficiently in advance of the time this rights offering expires to ensure that your payment is received by the subscription agent and clears by the expiration date of the rights offering. If you elect to exercise your subscription rights, we urge you to consider using a wire transfer of funds to ensure that the subscription agent receives your funds prior to the expiration date.

Delivery of Subscription Materials and Payment

You should deliver your subscription rights certificate and payment of the subscription price or, if applicable, notices of guaranteed delivery, to the subscription agent by one of the methods described below.

By mail to: Registrar and Transfer Company, Attn. Reorg./Exchange Department, 10 Commerce Dr., Cranford, NJ 07016.
By overnight delivery services to: Registrar and Transfer Company, Attn. Reorg./Exchange Department, 10 Commerce Dr., Cranford, NJ 07016.
You may call the subscription agent at 1-800-368-5948.

Your delivery to another address or by any method other than as set forth above will not constitute valid delivery.

Errors in Exercise; Incorrect Subscription Payment Amount

If you do not indicate the number of subscription rights being exercised, if you do not forward full payment of the total subscription price payment for the number of rights that you indicate are being exercised, or if your aggregate subscription price payment is greater than the amount you owe for your subscription, the subscription agent will attempt to contact you to correct the discrepancy. However, if the subscription agent is unable to contact you, or you do not provide the requested information, you will be deemed not to have exercised your basic subscription privilege. Neither we nor the subscription agent will be liable for failure to contact you.

Your Funds Will Be Held by the Subscription Agent Until Shares of Our Common Stock Are Issued

The subscription agent will hold your payment of the subscription price in a segregated account with other payments received from other holders of subscription rights until we issue shares of our common stock to you upon consummation of this rights offering.

Medallion Guarantee May Be Required

Your signature on each subscription rights certificate must be guaranteed by an eligible institution, such as a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States, subject to standards and procedures adopted by the subscription agent, unless:

your subscription rights certificate provides that shares are to be delivered to you as record holder of those subscription rights, or
you are an eligible institution.

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Instructions to Nominee Holders

If you are a broker, a trustee or a depositary for securities who holds shares of our common stock for the account of others on July2, 2012, the record date for this rights offering, you should notify the respective beneficial owners of those shares of this rights offering as soon as possible to find out their intentions with respect to their subscription rights. You should obtain instructions from the beneficial owners with respect to their subscription rights, as set forth in the form entitled "Beneficial Owner Election Form" we have provided to you for your distribution to beneficial owners. If the beneficial owners so instruct, you should complete the appropriate subscription rights certificates and submit them to the subscription agent with the proper payment. If you hold shares of our common stock for the account(s) of more than one beneficial owner, you may exercise the number of subscription rights to which all such beneficial owners in the aggregate otherwise would have been entitled had they been direct record holders of our common stock on the rights offering record date, provided that you, as a nominee record holder, make a proper showing to the subscription agent by submitting the form entitled "Nominee Holder Certification" that we are providing to you with your rights offering materials. If you did not receive this form, you should contact the subscription agent to request a copy.

Instructions to Beneficial Owners

If you are a beneficial owner of shares of our common stock or will receive your subscription rights through a broker, custodian bank or other nominee, we are asking your broker, custodian bank or other nominee to notify you of this rights offering. If you wish to exercise or sell your subscription rights, you will need to have your broker, custodian bank or other nominee act for you. If you hold certificates of our common stock directly and would prefer to have your broker, custodian bank or other nominee act for you, you should contact your nominee and request it to effect the transactions for you. To indicate your decision with respect to your subscription rights, you should complete and return to your nominee the form entitled "Beneficial Owners Election Form." You should receive this form from your broker, custodian bank or other nominee with the other rights offering materials. If you wish to obtain a separate subscription rights certificate, you should contact your nominee as soon as possible and request that a separate subscription rights certificate be issued to you. You should contact your broker, custodian bank or other nominee if you do not receive this form but you believe you are entitled to participate in this rights offering. We are not responsible if you do not receive the form from your broker, custodian bank or nominee or if you receive it without sufficient time to respond.

Instructions for Completing Your Subscription Rights Certificate

You should read and follow the instructions accompanying the subscription rights certificates carefully.

You are responsible for the method of delivery of your subscription rights certificate(s) with your subscription price payment to the subscription agent. If you send your subscription rights certificate(s) and subscription price payment by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. We recommend the same for overnight deliveries. You should allow a sufficient number of days to ensure delivery to the subscription agent prior to the time this rights offering expires. Because uncertified personal checks may take at least five business days to clear, you are strongly urged to pay, or arrange for payment, by means of a wire transfer of funds.

Determinations Regarding the Exercise of Your Subscription Rights

We will decide all questions concerning the timeliness, validity, form and eligibility of the exercise of your subscription rights and any such determinations by us will be final and binding. We, in our sole discretion, may waive, in any particular instance, any defect or irregularity, or permit, in any particular instance, a defect or irregularity to be corrected within such time as we may determine. We will not be required to make uniform determinations in all cases. We may reject the exercise of any of your subscription rights because of any defect or irregularity. We will not accept any exercise of subscription rights until all irregularities have been waived by us or cured by you within such time as we decide, in our sole discretion.

The subscription agent will attempt to notify you of any defect or irregularity in connection with your submission of subscription rights certificates; however, neither we nor the subscription agent will be liable for failure to so notify you. We reserve the right to reject your exercise of subscription rights if your exercise is not in accordance with the terms of this rights offering or in proper form. We will also not accept the exercise of your subscription rights if our issuance of shares of our common stock to you could be deemed unlawful under applicable law.

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Regulatory Limitations

The exercise of your subscription rights may increase your ownership interest in our common stock. Pursuant to the regulations of the NYPSC, if you own more than 1% of our common stock, you may be disclosed in our reports filed with the NYPSC. If you own more than 5% of our common stock, you may be prohibited from engaging in certain transactions with us without the approval of the NYPSC. In addition, if you own more than 5% of our common stock, you are required to make certain filings with the SEC. If you own more than 10% of our common stock, you may require the consent of the NYPSC to acquire additional shares beyond this rights offering and be subject to certain trading restrictions by and required to make additional filings with the SEC. Finally, if you own more than 20% of our common stock, you are prohibited from engaging in certain transactions with us without the approval of our board of directors or shareholders pursuant to the New York Business Corporation Law, or the NYBCL.

We will not be required to issue to you shares of our common stock in this rights offering if, in our opinion, you would be required to obtain prior clearance or approval from any state or federal regulatory authorities to own or control the shares if, at the time this rights offering expires, you have not obtained the required clearance or approval.

Guaranteed Delivery Procedures

If you wish to exercise your subscription rights, but you do not have sufficient time to deliver the subscription rights certificate evidencing your subscription rights to the subscription agent on or before the time this rights offering expires, you may exercise your subscription rights by the following guaranteed delivery procedure:

deliver to the subscription agent on or prior to the expiration date for this rights offering your subscription price payment in full for each share of our common stock you subscribed for under your subscription privileges in the manner set forth above in "- Method of Payment,"
deliver to the subscription agent on or prior to the expiration date the form entitled "Notice of Guaranteed Delivery," substantially in the form provided with the "Instructions as to Use of Corning Natural Gas Corporation Rights Certificates" distributed with your subscription rights certificates, and
deliver the properly completed subscription rights certificate evidencing your subscription rights being exercised and the related nominee holder certification, if applicable, with any required signature guarantee, to the subscription agent within three business days following the date of your Notice of Guaranteed Delivery.

Your Notice of Guaranteed Delivery must be delivered in substantially the same form provided with the Instructions as to the Use of Corning Natural Gas Corporation Subscription Rights Certificates, which will be distributed to you with your subscription rights certificate. Your Notice of Guaranteed Delivery must come from an eligible institution, or other eligible guarantee institutions that are members of, or participants in, a signature guarantee program acceptable to the subscription agent.

In your Notice of Guaranteed Delivery, you must state:

your name,
the number of subscription rights represented by your subscription rights certificates, the number of shares of our common stock for which you are subscribing under your basic subscription privilege and the number of shares of our common stock for which you are subscribing under your over-subscription privilege, if any, and

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your guarantee that you will deliver to the subscription agent any subscription rights certificates evidencing the subscription rights you are exercising within three business days following the date the subscription agent receives your Notice of Guaranteed Delivery.

You may deliver your Notice of Guaranteed Delivery to the subscription agent in the same manner as your subscription rights certificates at the address set forth above under "- Delivery of Subscription Materials and Payment" at page20 . Alternatively, you may transmit your Notice of Guaranteed Delivery to the subscription agent by facsimile at (908) 497-2311. To confirm facsimile deliveries, you may call 1-800-368-5948. The subscription agent will send you additional copies of the form of Notice of Guaranteed Delivery if you request them. Please call 1-800-368-5848 to request any copies of the form of Notice of Guaranteed Delivery.

Questions About Exercising Subscription Rights

If you have any questions or require assistance regarding the method of exercising your subscription rights or requests for additional copies of this prospectus, the Instructions as to the Use of Corning Natural Gas Corporation Subscription Rights Certificates or the Notice of Guaranteed Delivery, you should contact the subscription agent at the address and telephone number set forth above.

Subscription Agent; No Underwriter

We have appointed Registrar and Transfer Company to act as subscription agent for this rights offering. We will pay all fees and expenses of the subscription agent related to this rights offering and have also agreed to indemnify the subscription agent from liabilities that they may incur in connection with this rights offering. We have not engaged an underwriter in connection with this rights offering.

No Revocation

Once you have exercised your subscription privileges, you may not revoke your exercise, even if we extend the expiration date. Subscription rights not exercised prior to the expiration date of this rights offering will expire and will have no value.

Procedures for DTC Participants

We expect that the exercise of your basic subscription privilege and your over-subscription privilege may be made through the facilities of the Depository Trust Company, or DTC. If your subscription rights are held of record through DTC, you may exercise your basic subscription privilege and your over-subscription privilege by instructing DTC to transfer your subscription rights from your account to the account of the subscription agent, together with certification as to the aggregate number of subscription rights you are exercising and the number of shares of common stock you are subscribing for under your basic subscription privilege and your over-subscription privilege, if any, and your subscription price payment for each share that you subscribed for pursuant to your basic subscription privilege and your over-subscription privilege.

Subscription Price

The subscription price is $15.75 per share of our common stock. For more information with respect to how the subscription price was determined, see "Frequently Asked Questions About the Rights Offering" at page5.

Foreign and Other Shareholders

The subscription agent will mail rights certificates to you if you are a rights holder whose address is outside the United States or if you have an Army Post Office or a Fleet Post Office address. To exercise your rights, you must notify the subscription agent on or prior to the expiration date for the rights offering, and take all other steps which are necessary to exercise your rights, on or prior to that time. If you do not follow these procedures prior to the expiration of the rights offering, your rights will expire.

Methods for Transferring and Selling Subscription Rights

You may sell your subscription rights by contacting your broker or the institution through which you hold your securities. However, we will not take any steps to facilitate trading, and do not expect a market to develop in the trading of the subscription rights. Furthermore, we do not expect any transfers of subscription rights to be quoted on any inter-dealer quotation system or other national securities exchange. There has been no prior public market for the subscription rights, and we

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do not expect a trading market for the subscription rights to develop or, if a market develops, that the market will remain available throughout the subscription period. The rights will not be registered under any state securities laws, so you may not be able to transfer the rights in some states unless an exemption to such laws applies. You should consult your own counsel if you intend to sell or transfer your subscription rights.

If you do not exercise or sell your subscription rights, you will lose any value inherent in the subscription rights. See "- General Considerations Regarding the Partial Exercise, Transfer or Sale of Subscription Rights" at page24.

Transfer of Subscription Rights

You may transfer subscription rights in whole by endorsing the subscription rights certificate for transfer. Please follow the instructions for transfer included in the information sent to you with your subscription rights certificate. If you wish to transfer only a portion of the subscription rights, you should deliver your properly endorsed subscription rights certificate to the subscription agent. With your subscription rights certificate, you should include instructions to register the portion of the subscription rights you wish to transfer in the name of the transferee (and to issue a new subscription rights certificate to the transferee evidencing the transferred subscription rights). You may only transfer whole subscription rights exercisable with respect to whole shares of common stock and not fractions of a share of common stock. If there is sufficient time before the expiration of this rights offering, the subscription agent will send you a new subscription rights certificate evidencing the balance of your subscription rights that you did not transfer to the transferee. You may also instruct the subscription agent to send the subscription rights certificate to one or more additional transferees. If you wish to sell your remaining subscription rights, you may request that the subscription agent send you certificates representing your remaining (whole) subscription rights so that you may sell them through your broker or dealer.

If you wish to transfer all or a portion of your subscription rights, you should allow a sufficient amount of time prior to the time the subscription rights expire for the subscription agent to:

receive and process your transfer instructions, and
issue and transmit a new subscription rights certificate to your transferee or transferees with respect to transferred subscription rights, and to you with respect to any subscription rights you retained.

If you wish to transfer your subscription rights to any person other than a bank or broker, the signatures on your subscription rights certificate must be guaranteed by an eligible institution.

General Considerations Regarding the Partial Exercise, Transfer or Sale of Subscription Rights

The amount of time needed by your transferee to exercise or sell its subscription rights depends upon the method by which you, as the transferor, deliver the subscription rights certificates, the method of payment made by your transferee, and the number of transactions that the holder instructs the subscription agent to effect. You should also allow up to ten business days for your transferee to exercise or sell the subscription rights that you transferred to it. Neither we nor the subscription agent will be liable to a transferee or transferor of subscription rights if subscription rights certificates or any other required documents are not received in time for exercise or sale prior to the expiration time.

You will receive a new subscription rights certificate upon a partial exercise, transfer or sale of subscription rights only if the subscription agent receives your properly endorsed subscription rights certificate no later than 5:00p.m., New York City time, on September 18, 2012, three business days before the expiration date. The subscription agent will not issue a new subscription rights certificate if your subscription rights certificate is received after that time and date. If your instructions and subscription rights certificates are received by the subscription agent after that time and date, you will not receive a new subscription rights certificate and, therefore, will not be able to sell or exercise your remaining subscription rights.

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You are responsible for all commissions, fees and other expenses (including brokerage commissions and transfer taxes) incurred in connection with the purchase, sale or exercise of your subscription rights, except that we will pay any fees of the subscription agent associated with this rights offering. Any amounts you owe will be deducted from your account.

If you do not exercise or sell your subscription rights before the expiration date, your subscription rights will expire without value and will no longer be exercisable.

No Board Recommendation

An investment in shares of our common stock must be made according to each investor's evaluation of its own best interests and after considering all of the information in this prospectus, including the "Risk Factors" section of this prospectus beginning at page10. Neither we nor our board of directors makes any recommendation to subscription rights holders regarding whether they should exercise or sell, any or all of, their rights.

Shares of Common Stock and Warrants Outstanding after the Rights Offering

As of [June 21, 2012], there were [1,972,163] shares of our common stock outstanding. If all of the rights being issued are exercised, we will issue a total of 260,000 additional shares of common stock at an exercise price of $15.75 per share. Accordingly, assuming all of the shares of common stock offered in this rights offering are issued, there will be approximately 2,218,683 shares of our common stock outstanding. The number of shares of our common stock outstanding is subject to any increases that may occur after the date of this prospectus as a result of the exercise, conversion or exchange of outstanding stock options, our dividend reinvestment plan or issuing shares for director compensation.

Interests of Officers and Directors in the Rights Offering

The officers and directors of Corning who hold shares of our common stock as of the record date will receive the same rights as other shareholders.

DESCRIPTION OF SECURITIES TO BE REGISTERED

Capital Stock

The following description of our capital stock and provisions of our Restated Certificate of Incorporation (our "Charter") and our Second Amended and Restated By-laws (our "By-Laws") are summaries and are qualified by reference to our Charter and By-laws. For more detail about our Charter and By-laws you should refer to the Charter and By-laws, which have been filed as exhibits to other reports incorporated by reference into this prospectus.

General Background

Our authorized capital stock consists of 3.5 million shares of common stock, par value $5.00 per share, and 500,000 shares of preferred stock, par value $5.00 per share. As of June 20, 2012, there were 1,972,163 shares of common stock outstanding and no shares of preferred stock outstanding. Our Charter does not prohibit us from issuing non-voting equity securities nor does it contain any redemption or sinking fund provisions.

Common Stock

All of our outstanding shares of common stock are validly issued, fully paid and non-assessable. The holders of our common stock are entitled to such dividends (whether payable in cash, property or capital stock) as may be declared from time to time by our board of directors from legally available funds, property or stock and will be entitled after payment of all prior claims, to receive all of our assets upon the liquidation, dissolution or winding up of our company. Generally, holders of our common stock have no redemption, conversion or preemptive rights to purchase or subscribe for our securities.

The holders of common stock are entitled to vote on all matters as a single class, and each holder of common stock is entitled to one vote for each share of common stock owned. Holders of our common stock do not have cumulative voting rights. Our common stock is not currently traded on any securities exchange. Shares of our common stock are traded over-the-counter and sales are reported on the OTC Bulletin Board ^(r) under the symbol "CNIG."

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Preferred Stock

Our board of directors is authorized, subject to certain limitations prescribed by law, to issue up to 500,000 shares of preferred stock in one or more classes or series and to fix the shares' designations, powers, preferences and relative participation, option or other special rights and qualifications, limitation or restrictions, including the dividend rate, conversion or exchange rights, redemption price and liquidation preference of any such series. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock. Also, the issuance of preferred stock with voting and conversion rights could materially and adversely affect the voting power of the holders of our common stock and may have the effect of delaying, deferring or preventing a change in control of Corning. We have no current plans to issue any preferred stock.

Indemnification of Directors and Officers

The NYBCL permits a corporation to indemnify its current and former directors and officers against expenses, judgments, fines and amounts paid in connection with a legal proceeding. To be indemnified, the person must have acted in good faith and in a manner the person reasonably believed to be in, and not opposed to, the best interests of the corporation. With respect to any criminal action or proceeding, the person must not have had reasonable cause to believe the conduct was unlawful.

Our Charter and By-laws provide that, to the fullest extent permitted by the NYBCL, we will indemnify our present and future directors and officers against all expenses actually and reasonably incurred by them as a result of their being threatened with or otherwise involved in any action, suit or proceeding (other than an action commenced on our own behalf) by virtue of the fact that they are or were one of our officers or directors.

Our by-laws also provide that we may purchase and maintain insurance to indemnify Corning for any obligation we incur as a result of the indemnification of directors and officers, or to indemnify directors and officers, pursuant to our by-laws and in accordance with the NYBCL.

In addition to the provisions of our Charter and By-laws providing for indemnification of directors and officers, we have entered into an employment agreement with Michael I. German, our president and chief executive officer, which provides for us to indemnify Mr. German against all expenses actually and reasonably incurred by him as a result of his being threatened with or otherwise involved in any action, suit or proceeding by virtue of the fact that he is or was one of our officers.

SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

The following discussion is a summary of the material United States federal income tax consequences of the rights offering to holders of our common stock. This discussion, to the extent it states matters of U.S. federal tax law or legal conclusions and subject to the qualifications herein, represents the opinion of Nixon Peabody LLP. That opinion is based on facts described in this prospectus and on other factual assumptions, representations and determinations, including those of officers of the Company provided to counsel. This discussion addresses only the federal income tax consequences to holders of common stock that hold their shares as capital assets and does not address all of the income tax consequences that may be relevant to particular holders of shares of common stock in light of their individual circumstances. This discussion does not address the tax consequences to holders of common stock who are subject to special rules, including, without limitation, financial institutions, tax-exempt organizations, insurance companies, broker-dealers, dealers in securities or foreign currencies, foreign holders, persons who hold their shares as or in a hedge against currency risk, persons who hold their shares as a result of a constructive sale or as part of a conversion transaction or holders who acquired their shares of common stock pursuant to the exercise of employee stock options or otherwise as compensation. In addition, this discussion does not address the tax consequences to holders of common stock under any state, local or foreign tax laws or the alternative minimum tax provisions of the Internal Revenue Code.

This discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), laws, regulations, rulings and decisions in effect on the date of this prospectus, all of which are subject to change, possibly with retroactive effect, and to varying interpretations, that could result in United States federal income tax consequences different from those described below. Opinions of counsel are not binding on the Internal Revenue Service (the "IRS") or any court. As a result, we cannot

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assure you that the tax consequences described in this discussion will not be challenged by the IRS or will be sustained by a court if challenged by the IRS. No ruling has been or will be sought from the IRS as to the income tax consequences of the rights offering to holders of common stock. The IRS is not bound by the opinions of our counsel.

Holders of common stock are urged to consult their own tax advisors as to the specific tax consequences of the rights offering to them, including the applicable federal, state, local and foreign tax consequences of the rights offering to them and the effect of possible changes in tax laws.

Tax Consequences of the Rights Offering

The following discussion summarizes the United States federal income tax consequences to a holder of our common stock upon the holder's initial receipt of the subscription rights and upon the subsequent exercise, expiration or sale of such rights.

Receipt of Subscription Rights; Tax Basis in the Subscription Rights

You should not recognize taxable income for U.S. federal income tax purposes in connection with the receipt of subscription rights in the rights offering if the rights offering is not part of a "disproportionate distribution" within the meaning of section 305 of the Code. A disproportionate distribution is a distribution or a series of distributions, including deemed distributions, that has the effect of the receipt of cash or other property by some shareholders or holders of debt instruments convertible into stock and an increase in the proportionate interest of other shareholders in a company's assets or earnings and profits.

We believe that the distribution of rights in the rights offering does not constitute an increase in the proportionate interest of some shareholders in Corning's assets or earnings and profits for the purpose of section 305 of the Code because all of our shareholders will receive subscription rights in the rights offering based upon their respective ownership our common stock. Accordingly, we do not believe that the rights offering should constitute part of a "disproportionate distribution," pursuant to section 305 of the Code. However, there can be no assurances that our application of section 305 to the rights offering is accurate. In the unlikely event the IRS successfully asserts that your receipt of subscription rights is currently taxable pursuant to section 305 of the Code, the discussion under the heading "Consequences if the Rights Offering Is Considered Part of a Disproportionate Distribution" below describes the tax consequences that will result from such a determination.

Assuming that the distribution is not currently taxable, a holder's tax basis in the subscription rights will depend on the fair market value of the subscription rights and the fair market value of our common stock at the time of the distribution.

If the total fair market value of the subscription rights being distributed in this offering represents 15% or more of the total fair market value of our common stock at the time of the distribution, a holder must allocate the basis of the holder's shares of common stock (with respect to which the subscriptions rights were distributed) between such stock and the subscription rights received by such holder. This allocation is made in proportion to the fair market value of the common stock and the fair market value of the subscription rights at the date of distribution. The fair market value of the subscription rights on the date the subscription rights will be distributed is uncertain, and we have not obtained, and do not intend to obtain, an appraisal of the fair market value of the subscription rights on that date. In determining the fair market value of the subscription rights, you should consider all relevant facts and circumstances, including any difference between the subscription price of the subscription rights and the sale price of our common stock on the OTC Bulletin Board ^(r) on the date that the subscription rights are distributed, the length of the period during which the subscription rights may be exercised, and the fact that the subscription rights are transferable.
If the total fair market value of the subscription rights being distributed in this offering is less than 15% of the total fair market value of our common stock at the time of the distribution, the basis of such subscription rights will be zero unless the holder elects to allocate part of the basis of the holder's shares of common stock (with respect to which the subscriptions rights were distributed) to the subscription rights. A holder makes such an election by attaching a statement to the holder's tax return for the year in which the subscription rights are received. This election, once made, will be irrevocable with respect to those rights. Any holder that makes such election should retain a

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copy of the election and of the tax return with which it was filed in order to substantiate the use of an allocated basis upon a subsequent disposition of the stock acquired by exercise. If the basis of a holder's subscription rights is deemed to be zero because the fair market value of the subscription rights at the time of distribution is less than 15% of the fair market value of our common stock and because the holder does not make the election described above, the holder's basis in the shares of common stock with respect to which such rights are received will not change.

The holding period for the subscriptions rights received by a holder of common stock in this rights offering will include the holder's holding period for the common stock with respect to which the subscriptions rights were received.

Exercise of Subscription Rights

A holder of common stock will not recognize any gain or loss upon the exercise of subscription rights received in the rights offering.

The tax basis of the common stock acquired through exercise of the subscription rights will equal the sum of (a) the exercise price and (b) the holder's tax basis, if any, in the subscription rights (determined as described above). The holding period for the common stock acquired through exercise of the subscription rights will begin on the date the subscriptions rights are exercised.

Expiration of Subscription Rights

A holder who allows the subscription rights to expire will not recognize any gain or loss, and no portion of the tax basis of the common stock owned by such holder with respect to which such subscription rights were received will be allocated to the unexercised subscription rights.

Sale of Subscription Rights

A holder that sells the subscription rights to another person will recognize taxable gain or loss, if any, in an amount equal to the difference between (a) the proceeds from the sale and (b) the holder's tax basis in the subscription rights being sold (determined as described above). Such gain or loss will be a capital gain or loss if the subscription right is a capital asset in the hands of the seller.

Consequences if the Rights Offering Is Considered Part of a Disproportionate Distribution

If the rights offering is part of a disproportionate distribution, the distribution of subscription rights would be taxable to you as a dividend to the extent that the fair market value of the subscription rights you receive is allocable to our current and accumulated earnings and profits for the taxable year in which the subscription rights are distributed. We cannot determine prior to the consummation of the rights offering the extent to which we will have sufficient current and accumulated earnings and profits to cause any distribution to be treated as a dividend. Dividends received by corporate holders of our common stock are taxable at ordinary corporate tax rates subject to any applicable dividends-received deduction. Dividends received by noncorporate holders of our common stock in taxable years beginning before January 1, 2013, are taxed under current law at the holder's capital gain tax rate (a maximum rate of 15%), provided that the holder meets applicable holding period and other requirements. Any distributions in excess of our current and accumulated earnings and profits will be treated as a tax-free return of basis, and any further distributions in excess of your tax basis in our common stock will be treated as gain from the sale or exchange of our common stock. Regardless of whether the distribution of subscription rights is treated as a dividend, as a tax-free return of basis or as gain from the sale or exchange of our common stock, your tax basis in the subscription rights you receive will be their fair market value.

If the receipt of subscription rights is taxable to you as described in the previous paragraph and you allow subscription rights received in the rights offering to expire, you should recognize a short-term capital loss equal to your tax basis in the expired subscription rights. Your ability to use any capital loss is subject to certain limitations. You will not recognize any gain or loss upon the exercise of the subscription rights, and the tax basis of the shares of our common stock acquired through exercise of the subscription rights will equal the sum of the subscription price for the shares and your tax basis in the subscription rights. The holding period for the shares of our common stock acquired through exercise of the subscription rights will begin on the date the subscription rights are exercised.

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PLAN OF DISTRIBUTION

We intend to distribute rights certificates and copies of this prospectus to those persons who were holders of our common stock on July2, 2012, the record date for this offering, promptly following the effective date of the registration statement of which this prospectus forms a part. In the event that the offering is not fully subscribed, holders of rights who exercise all of their rights in the rights offering will have the opportunity to subscribe for unsubscribed rights pursuant to an oversubscription right. See "The Rights Offering" at page17. We have not agreed to enter into any standby or other arrangements to purchase or sell any rights or any shares of common stock except as otherwise disclosed in this prospectus. In addition, we have not entered into any agreements regarding stabilization activities with respect to our securities.

We have agreed to pay the subscription agent a fee plus certain expenses, which we estimate will total approximately $15,000. We estimate that our total expenses in connection with the rights offering will be approximately $50,000.

LEGAL MATTERS

Certain legal matters with respect to the validity of the shares of common stock offered by this prospectus will be passed upon for us by Nixon Peabody LLP.

EXPERTS

The financial statements incorporated by reference in this prospectus have been audited by EFP Rotenberg, LLP, an independent registered public accounting firm and successor to Rotenberg & Co., LLP, to the extent and for the periods set forth in its report incorporated herein by reference, and are incorporated by reference in reliance upon such reports given upon the authority of said firm as exerts in auditing and accounting.

OTHER INFORMATION WITH RESPECT TO THE COMPANY

Additional information regarding our business, properties, legal proceedings, equity compensation plans, changes in and disagreements with our accountants on accounting and financial disclosure, quantitative and qualitative disclosures about market risk, and our "Management's Discussion and Analysis of Financial Condition and Results of Operations" is incorporated in this prospectus by reference to our Annual Report on Form 10-K for the fiscal year ended September 30, 2011, filed with the SEC on December 28, 2011, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on December 29, 2011 and Amendment No. 2 on Form 10-K/A filed with the SEC on January 27, 2012, our Quarterly Report on Form 10-Q for the period ended December 31, 2011, filed with the SEC on February 14, 2012 as amended on Form 10-Q/A, filed with the SEC on February 14, 2012, and our Quarterly Report of Form 10-Q for the period ended March 31, 2012, filed with the SEC on May 11, 2012.

Additional information regarding our directors and executive officers, executive compensation, certain corporate governance matters, security ownership of certain beneficial owners and management, and certain relationships and related transactions is incorporated in this prospectus by reference to our Annual Report on Form10-K for the fiscal year ended September 30, 2011, filed with the SEC on December 28, 2011, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on December 29, 2011 and Amendment No. 2 on Form 10-K/A filed with the SEC on January 27, 2012, and our definitive Proxy Statement dated March 16, 2012, and filed with the SEC on March 16, 2012.

MATERIAL CHANGES

There have been no material changes in our affairs that have occurred since March 31, 2012, that have not been described in a Form 8-K filed under the Exchange Act.

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Accordingly, we file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 upon payment of the prescribed fees. You may obtain information on the operation of the Public Reference Room

Page 29.

by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy information statements and other information regarding issuers, like us, that file electronically with the SEC. You can access this web site at www.sec.gov or through a link on our website at www.corninggas.com. Information contained on our website is not included in the disclosures made in this prospectus.

We have filed a registration statement on Form S-1 with the SEC with respect to this rights offering. This prospectus is a part of the registration statement, but does not contain all of the information included in the registration statement. You may wish to inspect the registration statement and the exhibits to that registration statement for further information with respect to us and the securities offered in this prospectus. Copies of our registration statement and the exhibits to the registration statement are on file at the offices of the SEC and may be obtained without charge on the websites noted above or upon payment of the prescribed fee or may be examined without charge at the public reference facilities of the SEC described above. Statements contained in this prospectus concerning the provisions of documents are necessarily summaries of the material provisions of the documents, and each statement is qualified in our entirety by reference to the copy of the applicable document filed with the SEC.

We have elected to incorporate by reference into this prospectus some of the information we file with the SEC under the Exchange Act. This means that we are disclosing important information to you by referring you to those filings. The information we incorporate by reference is considered a part of this prospectus, and any subsequent information that we file with the SEC will automatically update and supersede this information. Any information that we subsequently modify or supersede will not constitute a part of this prospectus, except as so modified or superseded. Specifically, we incorporate by reference the documents listed below:

our Annual Report on Form 10-K for the fiscal year ended September 30, 2011, filed with the SEC on December 28, 2011, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on December 29, 2011 and Amendment No. 2 on Form 10-K/A filed with the SEC on January 27, 2012;
our definitive Proxy Statement dated March 16, 2012, and filed with the SEC on March 16, 2012, in connection with our Annual Meeting of Shareholders held on April 17, 2012;
our Quarterly Report on Form 10-Q for the period ended December 31, 2011, filed with the SEC on February 14, 2012 as amended on Form 10-Q/A, filed with the SEC on February 14, 2012, and our Quarterly Report on Form 10-Q for the period ended March 31, 2012, filed with the SEC on May 11, 2012; and
our Current Reports on Form 8-K filed with the SEC on January 5, 2012; January 17, 2012; January 27, 2012; February 10, 2012 ; February 21, 2012; February 28, 2012; March 6, 2012; April 19, 2012; and April 24, 2012.

We also incorporate by reference any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with SEC rules). We will provide, without cost, to each person, including any beneficial owner to whom a copy of this prospectus is delivered, a copy of any or all information that has been incorporated by reference in this prospectus but not delivered with it.

You may request a copy of the information that we have incorporated by reference, at no cost, by writing or telephoning us at the following address:

Corning Natural Gas

330 West William St.

Corning, New York 14830

Attn: Stanley G. Sleve

Telephone: (607) 936-3755

Page 30.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors and officers, we have been advised that, although the validity and scope of the governing statute have not been tested in court, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In addition, indemnification may be limited by state securities laws.

Page 31.

Appendix A

[Form of Subscription Rights Certificate]

[Face]

Certificate No. No. of Rights

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY'S PROSPECTUS DATED [_____________, 2012] (THE "PROSPECTUS") AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM REGISTRAR AND TRANSFER COMPANY, THE SUBSCRIPTION AGENT.

CORNING NATURAL GAS CORPORATION

(Incorporated under the laws of the State of New York)

SUBSCRIPTION RIGHTS CERTIFICATE

Evidencing Subscription Rights, each to Purchase One Share of Common Stock of

Corning Natural Gas Corporation

Subscription Price: $15.75 per Share of Common Stock

THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M.,

NEW YORK CITY TIME, ON SEPTEMBER 21, 2012, UNLESS EXTENDED BY THE COMPANY.

THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of subscription rights ("Rights") set forth on the face of this certificate. Each whole Right entitles the holder thereof, or its assigns, to subscribe for and purchase one share of common stock (the "Share"), with a par value of $5.00 per share, of Corning Natural Gas Corporation, a New York corporation (the "Company"), at a subscription price of $15.75 per Share (the "Basic Subscription Privilege"), pursuant to a rights offering (the "Rights Offering"), on the terms and subject to the conditions set forth in the Prospectus and the "Instructions as to the Use of Subscription Rights Certificates" accompanying this Subscription Rights Certificate. The Rights expire at 5:00 p.m. on September 21, 2012 , unless extended. If the Company extends the time for exercising the Rights, it will not extend such time more than 30 days past the original expiration date. If any Shares available for purchase in the Rights Offering are not purchased by other holders of Rights pursuant to the exercise of their Basic Subscription Privilege (the "Excess Shares"), any Rights holder that exercises its Basic Subscription Privilege in full may subscribe for a number of Excess Shares pursuant to the terms and conditions of the Rights Offering, subject to proration, as described in the Prospectus (the "Over-Subscription Privilege"). The Rights represented by this Subscription Rights Certificate may be exercised by completing the Form of Election to Purchase on the reverse side hereof and by returning the full payment of the subscription price for each Share in accordance with the "Instructions as to the Use of Subscription Rights Certificates" that accompanies this Subscription Rights Certificate. The Rights evidenced by this Subscription Rights Certificate may also be transferred or sold by completing the Assignment Form on the reverse side hereof in accordance with the "Instructions as to the Use of Subscription Rights Certificates" that accompanies this Subscription Rights Certificate.

This Subscription Rights Certificate is transferable on the books of Corning Natural Gas Corporation in person or by duly authorized attorney upon surrender of this Subscription Rights Certificate properly endorsed. This Subscription Rights Certificate is not valid unless countersigned by the transfer agent and registered by the registrar.

WITNESS the facsimile signatures of two duly authorized officers of Corning Natural Gas Corporation.

CORNING NATURAL GAS CORPORATION COUNTERSIGNED AND REGISTERED:

REGISTRAR AND TRANSFER COMPANY

BY: ___________________________________ as TRANSFER AGENT AND REGISTRAR

[Name], [Title]

BY: ___________________________________ BY: ___________________________________

[Name], [Title] [Name], [Title]

DATED: _______, 2012

Page A1.

[Form of Subscription Rights Certificate]

[Reverse]

CORNING NATURAL GAS CORPORATION

RIGHTS CUSIP: [____________]

This Rights Certificate must be received by the Subscription Agent, together with payment in full, by 5:00p.m., New York City time, on September 21, 2012, as the expiration date may be extended from time to time. Failure to submit this Rights Certificate to the Subscription Agent by that time or to comply with the guaranteed delivery procedures described in the Prospectus will result in a forfeiture of your Rights. Any subscription for shares of common stock of the Company in this rights offering is irrevocable.

Complete the Form of Election to Purchase or the Assignment Form, as applicable. Any improperly completed or unexecuted rights certificate for Shares may cause the Subscription Agent in its sole discretion to reject such rights certificate. If you have any questions, contact the Subscription Agent at 1-800-368-5948.

REGISTRAR AND TRANSFER COMPANY Subscription Agent By Mail, Hand or Overnight Courier Registrar and Transfer Company 10 Commerce Drive Cranford, NJ 07016 Attn: Reorg./Exchange Department

Delivery other than in the manner or to the addresses listed above will not constitute valid delivery.

Page A2.

ASSIGNMENT FORM

(To be executed by the registered holder if such holder desires to sell or

transfer to designated transferee through bank or broker)

FOR VALUE RECEIVED, ______________ hereby sells, assigns, and transfers unto:

SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

ASSIGNEE: _______________

Name: _______________

Address: _______________

the Rights evidenced hereby to purchase __________ shares of the common stock, par value $5.00 per share, of Corning Natural Gas Corporation (the "Company"), and does hereby irrevocably constitute and appoint Registrar and Transfer Company as transfer agent and registrar attorney to transfer those Rights on the books of the Company, with full power of substitution in the premises.

Dated: _______________, 2012

____________________________________________

NOTICE : The signatures to this assignment must correspond to the names as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.

Signatures Guaranteed:

By: ________________________

The signature(s) should be guaranteed by an eligible guarantor institution (bank, stock broker, savings and loan association or credit union) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15.

Page A3.

FORM OF ELECTION TO PURCHASE

PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY. The registered holder of this Rights Certificate is entitled to exercise the Rights to purchase the number of shares of the common stock, par value $5.00 per share, of Corning Natural Gas Corporation (the "Shares") shown in the upper right hand corner of the Subscription Rights Certificate and may subscribe for additional Shares upon the terms and conditions specified in the Prospectus.

The undersigned hereby notifies the Subscription Agent of its irrevocable election to subscribe for Shares in the following amounts:

To subscribe for Shares pursuant to your Basic Subscription Privilege, please complete lines (a) and (c) and sign below. To subscribe for Shares pursuant to your Over-Subscription Privilege, please also complete line (b).

(a) EXERCISE OF BASIC SUBSCRIPTION PRIVILEGE:

I subscribe for ____________ (No. of Shares) x $15.75 (Subscription Price) = $_____________ (Payment)

(b) EXERCISE OF OVER-SUBSCRIPTION PRIVILEGE:

If you have exercised your Basic Subscription Privilege in full and wish to subscribe for additional Shares pursuant to your Over-Subscription Privilege:

I subscribe for ____________ (No. of Shares) x $15.75 (Subscription Price) = $_____________ (Payment)

METHOD OF PAYMENT (CHECK ONE):

DELIVERY TO DIFFERENT ADDRESS

If you wish for the Shares underlying your subscription right or a certificate representing unexercised subscription rights to be delivered to an address different from that shown on the face of this Subscription Rights Certificate, please enter the alternate address below.

___________________________________________

[ _ ] Check drawn on a U.S. bank payable to "Registrar and Transfer Company as Subscription Rights Agent." Funds paid by a personal check may take at least five business days to clear.

[ _ ] Wire transfer of immediately available funds directly to the account maintained by Registrar and Transfer Company, as Subscription Agent for purposes of accepting subscriptions in this Rights Offering at:

TD Bank

6000 Atrium Way

Mt. Laurel, NJ 08054

ABA #031-201-360

Account: Registrar and Transfer Company, as Rights Offering Agent for Various Holders

A/C #xxx-xxx-5977

REF: Corning Natural Gas Corporation

Subscription Rights offer

TO SUBSCRIBE: I acknowledge that I have received the Prospectus for this Rights Offering and I hereby irrevocably subscribe for the number of Shares indicated above on the terms and conditions specified in the Prospectus.

________________________________

Signature of subscriber

Page A4.

FOR INSTRUCTIONS ON THE USE OF CORNING NATURAL GAS CORPORATION SUBSCRIPTION RIGHTS CERTIFICATES, CONSULT REGISTRAR AND TRANSFER COMPANY, THE SUBSCRIPTION AGENT, AT 1-800-368-5948

Appendix B

CORNING NATURAL GAS CORPORATION

INSTRUCTIONS AS TO THE USE OF SUBSCRIPTION RIGHTS CERTIFICATES

CONSULT THE SUBSCRIPTION AGENT, YOUR BANK

OR BROKER AS TO ANY QUESTIONS

NOTICE: Initial Expiration Date September 21, 2012, 5:00 p.m. New York City time.

Rights not properly exercised by the Expiration Date will expire.

The following instructions relate to a rights offering (the "Rights Offering") by Corning Natural Gas Corporation, a New York corporation ("Corning"), to the holders of record (the "Recordholders") of its common stock, par value $5.00 per share (the "Common Stock"), as described in Corning's Prospectus, dated [__________, 2012] (the "Prospectus"). Recordholders of Common Stock at the close of business on July 2, 2012 (the "Record Date"), are receiving transferable subscription rights (the "Rights") to subscribe for and purchase shares of Common Stock ("Shares"). An aggregate of up to 260,000 Shares are being offered by the Prospectus. Each Recordholder will receive one Right for each eight (8) shares of Common Stock owned of record as of the close of business on the Record Date. The Rights will expire, if not exercised, at 5:00 p.m., New York City time, on September 21, 2012, unless extended in the sole discretion of Corning (as it may be extended, the "Expiration Date"). If Corning extends the time for exercising the Rights, it will not extend such time more than 30 days past the original expiration date. After the Expiration Date, unexercised Rights will be null and void. Corning will not be obligated to honor any purported exercise of Rights received by Registrar and Transfer Company (the "Subscription Agent") after 5:00 p.m., New York City time, on the Expiration Date, regardless of when the documents relating to such exercise were sent, except pursuant to the Guaranteed Delivery Procedures described below. Corning may extend the Expiration Date by giving oral or written notice to the Subscription Agent on or before the Expiration Date, followed by a press release no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. The Rights will be evidenced by transferable Rights certificates (the "Subscription Rights Certificates").

Each Right allows the holder thereof to subscribe for one Share (the "Basic Subscription Privilege") at the cash price of $15.75 per Share (the "Subscription Price").

In addition, each holder of Rights who exercises their Basic Subscription Privilege in full will be eligible to subscribe (the "Over-Subscription Privilege") at the same cash price of $15.75 per Share for Shares that are not purchased pursuant to the exercise of Rights by other holders of Rights under the Basic Subscription Privilege (the "Excess Shares"), subject to availability and pro ration as described below. Each holder of Rights may only exercise their Over-Subscription Privilege if they exercised their Basic Subscription Privilege in full and other holders of Rights do not exercise their Basic Subscription Privilege in full. If there are not enough Excess Shares to satisfy all subscriptions made under the Over-Subscription Privilege, Corning will allocate the remaining Excess Shares pro rata among those holders of Rights who exercised their Over-Subscription Privileges. "Pro rata" means in proportion to the number of Shares that each holder of Rights has purchased by exercising their Over-Subscription Privilege. The Subscription Agent will return any excess payments by mail without interest or deduction promptly after the expiration of the Rights Offering. See "The Rights Offering - Subscription Privileges" in the Prospectus.

The number of Rights to which you are entitled is printed on the face of your Subscription Rights Certificate. You should indicate your wishes with regard to the exercise or transfer of your Rights by completing the appropriate portions of your Subscription Rights Certificate and returning the certificate to the Subscription Agent in the envelope provided pursuant to the procedures described in the Prospectus.

Your Subscription Rights Certificate or notice of guaranteed delivery, and subscription price payment, including final clearance of any checks, must be received by the Subscription Agent, on or before 5:00 p.m., New York City time, on the Expiration Date. Once a holder of Rights has exercised the Basic Subscription Privilege or the Over-Subscription Privilege, such exercise may not be revoked. Rights not exercised prior to the Expiration Date of the Rights Offering will expire without value.

Page B1.

1. Method of Subscription - Exercise of Rights.

To exercise your Rights, complete the Subscription Rights Certificate and send the properly completed and executed Subscription Rights Certificate evidencing your Rights, with any signatures required to be guaranteed so guaranteed, together with payment in full of the Subscription Price for each Share subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege, to the Subscription Agent, on or prior to 5:00p.m., New York City time, on the Expiration Date. Payment of the Subscription Price will be held in a segregated account to be maintained by the Subscription Agent. All payments must be made in U.S. dollars for the full number of Shares being subscribed for (a) by personal check drawn upon a U.S. bank or (b) by wire transfer of immediately available funds, to the account maintained by the Subscription Agent for purposes of accepting subscriptions in the Rights Offering at:

TD Bank [CHECK]

6000 Atrium Way, Mt. Laurel, NJ 08054

ABA #031-201-360

A/C #xxx-xxx-5977

(such account, the "Subscription Account"). Payments will be deemed to have been received by the Subscription Agent only upon (i) clearance of any uncertified check, or (ii)receipt of collected funds in the Subscription Account designated above.

Wire transfers : Any wire transfer should clearly indicate the identity of the subscriber who is paying the Subscription Price by the wire transfer. Subscribers who elect to submit payment by wire transfer must notify the Subscription Agent prior to initiating the wire transfer via email at corningrights@rtco.com or facsimile at (908) 497-2311.

Checks : If paying by personal check, please reference your Subscription Rights Certificate number on your check. If paying by personal check, please note that the funds paid thereby may take at least five business days to clear. Accordingly, Rights holders who wish to pay the Subscription Price by means of personal check are urged to make payment sufficiently in advance of the Expiration Date to ensure that such payment is received and clears by such date and are urged to consider payment by means of wire transfer of funds.

The Subscription Rights Certificate and payment of the Subscription Price, or, if applicable, Notices of Guaranteed Delivery (as defined below) must be delivered to the Subscription Agent by one of the methods described below:

By Mail/Hand Delivery/Overnight Courier

Registrar and Transfer Company

10 Commerce Drive

Cranford, NJ 07016

Attn: Reorg./Exchange Department

Telephone Number for Confirmation: (800) 368-5948

Delivery to any address or by a method other than those set forth above does not constitute valid delivery. If you have any questions or require additional copies of relevant documents please contact the Subscription Agent.

Page B2.

Privilege and the number of Shares, if any, being subscribed for pursuant to the Over-Subscription Privilege, and that you will guarantee the delivery to the Subscription Agent of any properly completed and executed Subscription Rights Certificate or Subscription Rights Certificates evidencing such Rights within three business days following the date of the Notice of Guaranteed Delivery. If this procedure is followed, the properly completed Subscription Rights Certificate or Subscription Rights Certificates evidencing the Rights being exercised, with any signatures required to be guaranteed so guaranteed, must be received by the Subscription Agent within three business days following the date of the Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered to the Subscription Agent in the same manner as Subscription Rights Certificates at the address set forth above, or may be transmitted to the Subscription Agent by facsimile transmission (Facsimile No.: (908) 497-2311). Additional copies of the Notice of Guaranteed Delivery may be obtained upon request from the Subscription Agent at the address, or by calling the telephone number, set forth above.

Banks, brokers and other nominee holders of Rights who exercise the Basic Subscription Privilege and the Over-Subscription Privilege on behalf of beneficial owners of Rights will be required to certify to the Subscription Agent and Corning, in connection with the exercise of the Over-Subscription Privilege, as to the aggregate number of Rights that have been exercised and the number of Shares that are being subscribed for pursuant to the Over-Subscription Privilege, by each beneficial owner of Rights (including such nominee itself) on whose behalf such nominee holder is acting. If more Excess Shares are subscribed for pursuant to the Over-Subscription Privilege than are available for sale, the Excess Shares will be allocated, as described above, among beneficial owners exercising the Over-Subscription Privilege.

If you exercise less than all of the Rights evidenced by your Subscription Rights Certificate by so indicating in the Form of Election to Purchase on the reverse side of your Subscription Rights Certificate, the Subscription Agent, (i) if you so request, will either issue to you a new Subscription Rights Certificate evidencing the unexercised Rights or (ii) if you so indicate in the Assignment Form on the reverse side of your Subscription Rights Certificate, will transfer the unexercised Rights in accordance with your instructions. A new Subscription Rights Certificate will be issued to you or transferred according to your instructions upon the partial exercise of Rights only if the Subscription Agent receives a properly endorsed Subscription Rights Certificate no later than 5:00p.m., New York City time, on September 18, 2012, the third business day prior to the initial Expiration Date. After such date no new Subscription Rights Certificates will be issued. Accordingly, after such date if you exercise less than all of your Rights, you will lose the power to exercise your remaining Rights. All deliveries of newly issued Subscription Rights Certificates will be at your own risk.

If you do not indicate the number of Subscription Rights being exercised, if you do not forward full payment of the total Subscription Price payment for the number of Rights that you indicate are being exercised, or if your aggregate Subscription Price payment is greater than the amount you owe for your subscription, the Subscription Agent will attempt to contact you to correct the discrepancy. However, if the Subscription Agent is unable to contact you, or you do not provide the requested information, you will be deemed not to have exercised your Basic Subscription Privilege. Neither the Subscription Agent nor the Company will be liable for failure to contact you.

2. Issuance of Shares of Common Stock.

The following deliveries and payments will be made to the address shown on the face of your Subscription Rights Certificate unless you provide instructions to the contrary on the reverse side of your Subscription Rights Certificate under the heading "Delivery to a Different Address."

a. Basic Subscription Privilege . As soon as practicable after the Expiration Date and the valid exercise of Rights, the Subscription Agent will mail to each exercising Rights holder certificates representing shares of

Page B3.

Common Stock underlying the Shares purchased pursuant to the Basic Subscription Privilege. See "The Rights Offering - Subscription Privileges - Basic Subscription Privilege" in the Prospectus.

b. Over-Subscription Privilege . As soon as practicable after the Expiration Date and after all pro rations and adjustments contemplated by the terms of the Rights Offering have been effected, the Subscription Agent will mail to each Rights holder who validly exercises the Over-Subscription Privilege certificates representing the number of shares of Common Stock underlying the Shares, if any, allocated to such Rights holder pursuant to the Over-Subscription Privilege. See "The Rights Offering - Subscription Privileges - Over-Subscription Privilege" in the Prospectus.

c. Excess Cash Payments . As soon as practicable after the Expiration Date and after all pro rations and adjustments contemplated by the terms of the Rights Offering have been effected, the Subscription Agent will mail to each Rights holder who exercises the Over-Subscription Privilege any excess amount, without interest or deduction, received in payment of the Subscription Price for Excess Shares that are subscribed for by such Rights holder but not allocated to such Rights holder pursuant to the Over-Subscription Privilege.

3. Sale or Transfer of Rights.

a. Sale of Rights through a Bank or Broker . To sell all Rights evidenced by a Subscription Rights Certificate through your bank or broker, sign the Assignment Form on the reverse side of your Subscription Rights Certificate leaving the rest of the form blank (your broker will add the buyer's name later). You must have your signature on the Assignment Form guaranteed by an Eligible Institution and deliver your Subscription Rights Certificate and the accompanying envelope to your bank or broker. Your Subscription Rights Certificate should be delivered to your bank or broker in ample time for it to be exercised. If the Assignment Form is completed without designating a transferee, the Subscription Agent may thereafter treat the bearer of the Subscription Rights Certificate as the absolute owner of all of the Rights evidenced by such Subscription Rights Certificate for all purposes, and the Subscription Agent shall not be affected by any notice to the contrary. Because your bank or broker cannot issue Subscription Rights Certificates, if you wish to sell fewer than all of the Rights evidenced by a Subscription Rights Certificate, either you or your bank or broker must instruct the Subscription Agent as to the action to be taken with respect to the Rights not sold, or you or your bank or broker must first have your Subscription Rights Certificate divided into Subscription Rights Certificates of appropriate denominations by following the instructions in Section 4 of these instructions. The Subscription Rights Certificates evidencing the number of Rights you intend to sell can then be transferred by your bank or broker in accordance with the instructions in this Section 3(a).

b. Transfer of Rights to a Designated Transferee . To transfer all of your Rights to a transferee other than a bank or broker, you must complete the Assignment Form in its entirety, execute the Subscription Rights Certificate and have your signature guaranteed by an Eligible Institution. A Subscription Rights Certificate that has been properly transferred in its entirety may be exercised by a new holder without having a new Subscription Rights Certificate issued. In order to exercise, or otherwise take action with respect to, such a transferred Subscription Rights Certificate, the new holder should deliver the Subscription Rights Certificate, together with payment of the applicable Subscription Price (with respect to the exercise of both the Basic Subscription Privilege and the Over-Subscription Privilege) and complete separate instructions signed by the new holder, to the Subscription Agent in ample time to permit the Subscription Agent to take the desired action. Because only the Subscription Agent can issue Subscription Rights Certificates, if you wish to transfer fewer than all of the Rights evidenced by your Subscription Rights Certificate to a designated transferee, you must instruct the Subscription Agent as to the action to be taken with respect to the Rights not sold or transferred, or you must divide your Subscription Rights Certificate into Subscription Rights Certificates of appropriate smaller denominations by following the instructions in Section 4 below. The Subscription Rights Certificate evidencing the number of Rights you intend to transfer can then be transferred by following the instructions in this Section 3(b).

Page B4.

by such new Subscription Rights Certificates to be exercised or sold by the recipients thereof. The Subscription Agent will facilitate transfers of Subscription Rights Certificates only until 5:00 p.m., New York City time, on September 18, 2012, the third business day before the initial Expiration Date.

d. Liability . Neither Corning nor the Subscription Agent shall have any liability to a transferee or transferor of Rights if Subscription Rights Certificates are not received in time for exercise or sale prior to the Expiration Date. Subscription Rights Certificates not exercised by the Expiration Date will expire and have no value. Neither Corning nor the Subscription Agent shall have any liability with respect to an expired Subscription Rights Certificate.

e. Commissions, Fees, and Expenses . Corning will pay all fees and expenses of the Subscription Agent and has also agreed to indemnify the Subscription Agent from certain liabilities that they may incur in connection with the Rights Offering. All commissions, fees, and other expenses (including brokerage commissions and transfer taxes) incurred in connection with the purchase, sale or exercise of Rights will be for the account of the transferor of the Rights, and none of such commissions, fees or expenses will be paid by Corning or the Subscription Agent.

4. Division of Subscription Rights Certificate into Smaller Denominations.

To have a Subscription Rights Certificate divided into smaller denominations, send your Subscription Rights Certificate, together with complete separate instructions (including specification of the denominations into which you wish your Rights to be divided) signed by you, to the Subscription Agent, allowing a sufficient amount of time for new Subscription Rights Certificates to be issued and returned so that they can be used prior to the Expiration Date. Alternatively, you may ask a bank or broker to effect such actions on your behalf. The Subscription Agent will facilitate subdivisions of Subscription Rights Certificates only until 5:00 p.m., New York City time, on September 18, 2012, three business days prior to the initial Expiration Date. Your signature must be guaranteed by an Eligible Institution if any of the new Subscription Rights Certificates are to be issued in a name other than that in which the old Subscription Rights Certificate was issued. Subscription Rights Certificates may not be divided into fractional Rights, and any instruction to do so will be rejected. As a result of delays in the mail, the time of the transmittal, the necessary processing time and other factors, you or your transferee may not receive the new Subscription Rights Certificates in time to enable the Rights holder to complete a sale or exercise by the Expiration Date. Neither Corning nor the Subscription Agent will be liable to either a transferor or transferee for any delays.

5. Execution .

a. Execution by Registered Holder . The signature on the Subscription Rights Certificate must correspond with the name of the registered holder exactly as it appears on the face of the Subscription Rights Certificate without any alteration, enlargement or change whatsoever. Persons who sign the Subscription Rights Certificate in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Subscription Agent in its sole and absolute discretion, must present to the Subscription Agent satisfactory evidence of their authority to so act.

b. Execution by Person Other than Registered Holder . If the Subscription Rights Certificate is executed by a person other than the holder named on the face of the Subscription Rights Certificate, proper evidence of authority of the person executing the Subscription Rights Certificate must accompany the same unless, for good cause, the Subscription Agent dispenses with proof of authority.

c. Signature Guarantees . Your signature must be guaranteed by an Eligible Institution if you specify special payment instructions.

6. Method of Delivery to Subscription Agent.

The method of delivery of Subscription Rights Certificates and payment of the Subscription Price to the Subscription Agent will be at the election and risk of the Rights holder, but, if sent by mail, it is recommended that you send your certificates and payments by registered mail, properly insured, with return receipt requested, and that a sufficient number of days be allowed to ensure delivery to the Subscription Agent and the clearance of payment prior to 5:00 p.m., New York City time, on the Expiration Date. Because uncertified personal checks may take at least five business days to clear, you are strongly urged to pay, or arrange for payment, by means of a wire transfer of funds.

Page B5.

7. Special Provisions Relating to the Delivery of Rights through the Depository Trust Company.

In the case of Rights that are held of record through the Depository Trust Company (the "Book-Entry Transfer Facility"), exercises of the Basic Subscription Privilege and of the Over-Subscription Privilege may be effected by instructing the Book-Entry Transfer Facility to transfer Rights from the Book-Entry Transfer Facility account of such holder to the Book-Entry Transfer Facility account of the Subscription Agent, together with certification as to the aggregate number of Rights exercised and the number of Shares thereby subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege by each beneficial owner of Rights on whose behalf such nominee is acting, and payment of the Subscription Price for each Share subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege.

Page B6.

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the fees and expenses to be incurred in connection with the registration of the securities being registered hereby, all of which will be borne by us. The amounts are estimates.

Description	Amount
SEC registration fee	$469.29
Accounting fees and expenses*	1,500.00
Legal fees and expenses*	20,000.00
Printing fees and expenses*	15,000.00
Miscellaneous expenses*	13,030.71
Total expenses*	$50,000.00

* Estimated solely for purposes of this table

Item 14. Indemnification of Directors and Officers.

The NYBCL permits a present or former director or officer of a corporation to be indemnified against certain expenses if the person has been successful, on the merit or otherwise, in defense of any proceeding brought against such person by virtue of the fact that the person is or was an officer or director of the corporation. In addition, the NYBCL permits the advancement of expenses relating to the defense of any proceeding to directors and officers contingent upon the person's commitment to repay advances for expenses in the case he or she is ultimately found not to be entitled to be indemnified.

The NYBCL provides that the indemnification provisions contained in the NYBCL are not exclusive of any other right that a person seeking indemnification may have or later acquire under any provision of a corporation's certification of incorporation or by-laws, or, when authorized by the corporation's certificate of incorporation or by-laws, by any agreement, by any vote of shareholders or disinterested directors or otherwise. The NYBCL also provides that a corporation may maintain insurance, at its expense, to protect its directors and officers in instances in which they may not otherwise be indemnified by the corporation under the provisions of the NYBCL provided the contract of insurance covering the directors and officers provides, in a manner acceptable to the New York superintendent of insurance, for a retention amount and for co-insurance.

Page II-1.

Item 15. Recent Sales of Unregistered Securities.

None.

Item 16. Exhibits and Financial Statement Schedules.

Except as otherwise indicated, the exhibits listed below are filed as part of this registration statement. References to exhibits or other filings under the caption "Location" indicate that that exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same, and that the exhibit referred to is incorporated by reference.

Exhibit
Number	Exhibit	Location
3.1	The Company's Restated Certificate of Incorporation	Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated September 26, 2007
3.2	Second Amended and Restated By-Laws of the Company	Incorporated by reference to Annex D to the Company's Definitive Proxy Statement filed on April 24, 2007 with the SEC
4.1	The Company's Stock Plan	Incorporated by reference to Annex A to the Company's Definitive Proxy Statement filed on April 24, 2007 with the SEC
4.2	Form of Subscription Rights Certificate	Filed herewith
4.3	Dividend Reinvestment Plan, dated May, 2009, and Amendment No. 1 thereto, adopted December14, 2009.	Filed herewith
5.1	Opinion of Nixon Peabody LLP as to legality of the Securities being Registered	Filed herewith
8.1	Opinion of Nixon Peabody LLP as to certain tax matters	Filed herewith
10.1*	Employment Agreement dated November30, 2006 between Michael German and the Company	Incorporated by reference to Exhibit10.2 of the Company's Current Report on Form 8-K dated November30, 2006
10.2*	Amended and Restated Severance Agreement effective August18, 2006 between the Company and KennethJ. Robinson	Incorporated by reference to Exhibit10.18 of the Company's Current Report on Form 8-K dated August14, 2006
Page II-2.

10.3	Credit Agreement made by the Company to Manufacturers and Traders Trust Company dated October 16, 2008	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated October 16, 2008
10.4	Replacement Term Note of the Company in favor of Manufacturers and Traders Trust Company dated October 16, 2008	Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated October 16, 2008
10.5	Demand Note made by the Company in favor of Manufacturers and Traders Trust Company dated October 27, 2008	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated October 27, 2008
10.6*	First Amendment to Employment Agreement between Michael I. German and the Company dated December 31, 2008	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 10-Q dated August 12, 2009
10.7*	Amended and Restated 2007 Stock Plan	Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 10-Q dated August 12, 2009
10.8	First Amendment to Note Agreements between the Company and Great West Life & Annuity Insurance Company dated December 1, 2009	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated January 6, 2010
10.9	Intercreditor and Collateral Agency Agreement among Manufacturers and Traders Trust Company, as collateral agent and bank lender, and Great West Life & Annuity Insurance Company dated December 1, 2009	incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated January 6, 2010
10.10	Amendment to Credit Agreement between the Company and Manufacturers and Traders Trust Company dated March 4, 2010	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated March 8, 2010
10.11	Replacement Term Note of the Company in favor of Manufacturers and Traders Trust Company dated March 4, 2010	Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated March 8, 2010
10.12	Term Loan Agreement between the Company and Community Bank, N.A. dated March 31, 2010	Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated May 7, 2010
10.13	Commercial Promissory Note between the Company and Community Bank, N.A. dated March 31, 2010	Incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K dated May 7, 2010
10.14	Commercial Security Agreement between the Company and Community Bank, N.A. dated March 31, 2010	Incorporated by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K dated May 7, 2010
Page II-3.

10.15	Commercial Security Agreement between the Company and Community Bank, N.A. dated March 31, 2010	Incorporated by reference to Exhibit 10.5 of the Company's Current Report on Form 8-K dated May 7, 2010
10.16	Negotiated 311 Gas Transportation Agreement between the Company and Talisman Energy USA, Inc. dated May 13, 2010, with confidential portions redacted. Confidential information omitted and filed separately with the SEC	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated May 21, 2010
10.17	Multiple Disbursement Term Note between the Company and Manufacturers and Traders Trust Company dated October 27, 2010	Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated October 27, 2010
10.18	General Security Agreement made by the Company and Manufacturers and Traders Trust Company dated October 27, 2010	Incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K dated October 27, 2010
10.19	Specific Security Agreement made by the Company and Manufacturers and Traders Trust Company dated October 27, 2010	Incorporated by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K dated October 27, 2010
10.20	Credit Agreement made by the Company and Manufacturers and Traders Trust Company dated October 27, 2010	Incorporated by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K dated October 27, 2010
10.21	Change in Terms Agreement between the Company and Community Bank N.A. dated March 10, 2011	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated March 10, 2011
10.22	Multiple Disbursement Term Note between the Company and Manufacturers and Traders Trust Company dated July 14, 2011	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated July 14, 2011
10.23	Promissory Note between the Company and Five Star Bank dated September 1, 2011	Filed herewith
10.24	Base Contract for Sale and Purchase of Natural Gas between the Company and ConocoPhillips dated April 1, 2011. Confidential information omitted and filed separately with the SEC	Incorporated by reference to Exhibit 10.56 of the Company's Amendment No. 2 to Annual Report on Form 10-K/A to the year ended September 31, 2011
10.25	Service Agreement, dated as of February 1, 2012, by and between the Company and the Village of Bath, New York, acting through Bath Electric Gas and Water Systems	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated February 6, 2012
Page II-4.

10.26	Commercial Line of Credit Agreement and Note as of February 27, 2012, by and between the Company and Community Bank, N.A.	Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated February 27, 2012
10.27*	Form of Change of Control Agreement between the Company and Firouzeh Sarhangi, Stanley G. Sleve, Matthew J. Cook, and Russell S. Miller	Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated April 17, 2012
10.28	Purchase Agreement, dated as of January 23, 2012, between the Company and Article 6 Marital Trust under the First Amended and Restated Jerry Zucker Revocable Trust dated April 2, 2007 ("Investor")	Incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K, dated January 25, 2012
10.29	Registration Rights Agreement between the Company and Investor, dated January 23, 2012	Incorporated by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K, dated January 25, 2012
10.30*	Settlement and Release Agreement between the Company and Thomas K. Barry dated December 30, 2011	Filed herewith
10.31	Operating Agreement of Leatherstocking Pipeline Company, LLC	Filed herewith
10.32	Operating Agreement of Leatherstocking Gas Company, LLC	Filed herewith
21	Subsidiary of the Company	Incorporated by reference to Exhibit 21 to the Company's Annual Report on Form 10-K to the year ended September 31, 2009
23.1	Consent of Nixon Peabody LLP	Included as part of Exhibits 5.1 and 8.1
23.2	Consent of EFP Rotenberg LLP	Filed herewith
24	Power of Attorney	Found on the signature page
99.1	Instructions as to Use of Corning Subscription Rights Certificate	Filed herewith
99.2	Letter to Shareholders from Chief Executive Officer to Accompany Prospectus	To be filed by amendment
	* Management or compensatory contract

Item 17. Undertakings

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental

Page II-5.

change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or any decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low end or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities to be offered therein, and the offering of such securities at that time shall be deemed to be an initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which shall remain unsold at the termination of the offering.

(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i) If the registrant is relying on Rule 430B:

(A) Each prospectus filed by the registrant pursuant to Rule424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(B) Each prospectus required to be filed pursuant to Rule424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule430B relating to an offering made pursuant to Rule415(a)(1)(i), (vii)or (x)for the purpose of providing information required by section10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

Page II-6.

(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b) The undersigned registrant hereby undertakes that, for the purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section13(a) or Section15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Page II-7.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Corning, State of New York, on June 26, 2012.

CORNING NATURAL GAS CORPORATION

By: /s/ Michael I. German

Michael I. German

President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Dated: June 26, 2012	/s/ Michael I. German Michael I. German, President and Chief Executive Officer and Director (Principal Executive Officer)

Dated: June 26, 2012	/s/ Firouzeh Sarhangi Firouzeh Sarhangi, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael I. German, Firouzeh Sarhangi and Stanley G. Sleve, and each of them, his true and lawful attorneys-in-fact and agents, each with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this registration statement, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirement of the Securities of Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated:

Dated: June 15, 20	/s/ Henry B. Cook, Jr.	Director
	Henry B. Cook, Jr.

Dated: June 15, 2012	/s/ Ted W. Gibson	Director
	Ted W. Gibson

Dated: June 15, 2012	/s/ Joseph P. Mirabito	Director
	Joseph P. Mirabito

Dated: June 15, 2012	/s/ William Mirabito	Director
	William Mirabito

Dated: June 15, 2012	/s/ George J. Welch	Director
	George J. Welch

Dated: June 15, 2012	/s/ John B. Williamson, Jr.	Director
	John B. Williamson, Jr.

Exhibit 4.2

[Form of Subscription Rights Certificate]

[Face]

Certificate No. No. of Rights

CORNING NATURAL GAS CORPORATION

(Incorporated under the laws of the State of New York)

SUBSCRIPTION RIGHTS CERTIFICATE

Evidencing Subscription Rights, each to Purchase One Share of Common Stock of

Corning Natural Gas Corporation

Subscription Price: $15.75 per Share of Common Stock

THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M.,

NEW YORK CITY TIME, ON SEPTEMBER 14, 2012, UNLESS EXTENDED BY THE COMPANY.

THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of subscription rights ("Rights") set forth on the face of this certificate. Each whole Right entitles the holder thereof, or its assigns, to subscribe for and purchase one share of common stock (the "Share"), with a par value of $5.00 per share, of Corning Natural Gas Corporation, a New York corporation (the "Company"), at a subscription price of $15.75 per Share (the "Basic Subscription Privilege"), pursuant to a rights offering (the "Rights Offering"), on the terms and subject to the conditions set forth in the Prospectus and the "Instructions as to the Use of Subscription Rights Certificates" accompanying this Subscription Rights Certificate. The Rights expire at 5:00 p.m. on September 21, 2012, unless extended. If the Company extends the time for exercising the Rights, it will not extend such time more than 30 days past the original expiration date. If any Shares available for purchase in the Rights Offering are not purchased by other holders of Rights pursuant to the exercise of their Basic Subscription Privilege (the "Excess Shares"), any Rights holder that exercises its Basic Subscription Privilege in full may subscribe for a number of Excess Shares pursuant to the terms and conditions of the Rights Offering, subject to proration, as described in the Prospectus (the "Over-Subscription Privilege"). The Rights represented by this Subscription Rights Certificate may be exercised by completing the Form of Election to Purchase on the reverse side hereof and by returning the full payment of the subscription price for each Share in accordance with the "Instructions as to the Use of Subscription Rights Certificates" that accompanies this Subscription Rights Certificate. The Rights evidenced by this Subscription Rights Certificate may also be transferred or sold by completing the Assignment Form on the reverse side hereof in accordance with the "Instructions as to the Use of Subscription Rights Certificates" that accompanies this Subscription Rights Certificate.

WITNESS the facsimile signatures of two duly authorized officers of Corning Natural Gas Corporation.

CORNING NATURAL GAS CORPORATION COUNTERSIGNED AND REGISTERED:

REGISTRAR AND TRANSFER COMPANY

BY: ___________________________________ as TRANSFER AGENT AND REGISTRAR

[Name], [Title]

BY: ___________________________________ BY: ___________________________________

[Name], [Title] [Name], [Title]

DATED: _______, 2012

[Form of Subscription Rights Certificate]

[Reverse]

CORNING NATURAL GAS CORPORATION

RIGHTS CUSIP: [____________]

REGISTRAR AND TRANSFER COMPANY

Subscription Agent

By Mail, Hand or Overnight Courier

Registrar and Transfer Company

10 Commerce Drive

Cranford, NJ 07016

Attn: Reorg./Exchange Department

Delivery other than in the manner or to the addresses listed above will not constitute valid delivery.

ASSIGNMENT FORM

(To be executed by the registered holder if such holder desires to sell or

transfer to designated transferee through bank or broker)

FOR VALUE RECEIVED, ______________ hereby sells, assigns, and transfers unto:

SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

ASSIGNEE: _______________

Name: ___________________

Address: _________________

Dated: _______________, 2012

____________________________________________

Signatures Guaranteed:

By: ________________________

FORM OF ELECTION TO PURCHASE

The undersigned hereby notifies the Subscription Agent of its irrevocable election to subscribe for Shares in the following amounts:

(a) EXERCISE OF BASIC SUBSCRIPTION PRIVILEGE:

I subscribe for ____________ (No. of Shares) x $15.75 (Subscription Price) = $_____________ (Payment)

(b) EXERCISE OF OVER-SUBSCRIPTION PRIVILEGE:

If you have exercised your Basic Subscription Privilege in full and wish to subscribe for additional Shares pursuant to your Over-Subscription Privilege:

I subscribe for ____________ (No. of Shares) x $15.75 (Subscription Price) = $_____________ (Payment)

METHOD OF PAYMENT (CHECK ONE):

DELIVERY TO DIFFERENT ADDRESS

___________________________________________

[ _ ] Check drawn on a U.S. bank payable to "Registrar and Transfer Company as Subscription Agent." Funds paid by a personal check may take at least five business days to clear.

[ _ ] Wire transfer of immediately available funds directly to the account maintained by Registrar and Transfer Company, as Subscription Rights Agent for purposes of accepting subscriptions in this Rights Offering at:

TD Bank

6000 Atrium Way

Mt. Laurel, NJ 08054

ABA #031-201-360

Account: Registrar and Transfer Company, as Rights Offering Agent for Various Holders

A/C #xxx-xxx-5977

REF: Corning Natural Gas Corporation

Subscription Rights offer

________________________________

Signature of subscriber

FOR INSTRUCTIONS ON THE USE OF CORNING NATURAL GAS CORPORATION SUBSCRIPTION RIGHTS CERTIFICATES, CONSULT:

REGISTRAR AND TRANSFER COMPANY, AS THE SUBSCRIPTION RIGHTS AGENT, at 1-800-368-5948

Corning Natural Gas Corporation

Dividend Reinvestment Plan

1. PURPOSE OF THE PLAN

The purpose of the Dividend Reinvestment Plan (the "Plan") is to provide the shareholders of Corning Natural Gas Corporation ("Corning") with a convenient and economical method of investing cash dividends in additional shares of common stock of Corning.

2. DEFINITIONS

For purposes of the Plan, the following words or phrases will have the meanings assigned to them below:

(a) "Authorization Form" will mean the form or other document designated by the Plan Administrator as the evidence of a shareholder's election to participate in the Plan.

(b) "Corning" will mean Corning Natural Gas Corporation.

(d) "Investment Date" will mean the first business day following a Dividend Payment Date or as soon as practicable thereafter.

(e) "Participant" will mean a shareholder of record of Corning who has elected to participate in the Plan by delivering an executed Authorization Form to the Plan Administrator.

(f) "Plan" will mean the Corning Natural Gas Corporation Dividend Reinvestment Plan.

(g) "Plan Account" will mean the account maintained by the Plan Administrator for the benefit of a Participant.

(h) "Plan Administrator" will mean Registrar and Transfer Company, or such other independent agent as Corning may from time to time appoint to administer the Plan.

(i) "Plan Shares" will mean the shares of Stock that are held by the Plan Administrator for the benefit of the Participants in the Plan.

(j) "Stock" will mean the common stock, par value $5.00 per share, of Corning.

3. ADMINISTRATION

The Plan will be administered by the Plan Administrator. All Plan Shares will be registered in the name of the Plan Administrator (or its nominee), as agent of the respective Participants.

4. PARTICIPATION

Holders of record of no fewer than ten (10) shares of Stock of the Company are eligible to participate in the Plan, except as otherwise determined by the Board of Directors of Corning. The Board of Directors may refuse to offer the Plan to shareholders of the Company residing in any state which requires the registration or qualification of the Stock to be issued pursuant to the Plan, or exemption therefrom, if such registration, qualification or exemption results in undue burden or expense to Corning, as determined by the Board of Directors in its sole discretion.

Beneficial owners of Stock whose shares are registered in a name other than their own may request their broker or nominee to transfer their shares into their own name or request that the broker or nominee enroll in the plan on their behalf by completing and signing an Authorization Form.

5. ENROLLMENT

A shareholder of record may enroll in the Plan by completing and signing an Authorization Form and returning it to the Plan Administrator. If an Authorization Form requesting reinvestment of dividends is received by the Plan Administrator no fewer than five (5) business days before the record date for an applicable Dividend Payment Date, reinvestment will commence with that dividend on the immediately following Investment Date. A shareholder of record may have dividends reinvested in the Plan with respect to less than all of the stock owned by the shareholder. However, a shareholder of record must enroll at least ten (10) shares in the Plan to become a Participant.

6. PURCHASES

Stock needed to fund the Plan may be (1) issued directly by Corning from authorized but unissued shares, (2) issued directly by Corning from its treasury shares, or (3) through a combination of (1) and (2) above. Participants will be credited for whole and fractional Plan Shares in their Plan Accounts.

No interest will be paid by the Plan Administrator on dividend payments pending their investment in Stock.

The number of shares that will be purchased for each Participant on any Investment Date will depend on the amount of the Participant's cash dividend and the purchase price of the Stock. The purchase price will be determined by averaging the closing price of the Company's common stock on the previous five (5) days on which the stock traded on the Nasdaq Stock Market's OTC Bulletin Board or such other market where the stock is traded. This average price will be multiplied by 0.95.

Each Participant's account will be credited with that number of Plan Shares (including fractional shares computed to four decimal places) equal to the total amount to be invested, divided by the applicable purchase price (also computed to four decimal places).

The dividends payable to Participants will be retained by the Company as consideration for the Stock issued by the Company to fund the Plan.

Participants will not be entitled to receive certificates for fractional shares of Stock. If after the issuance of a certificate, a Participant is entitled to fractional shares, that amount of cash equal to the market value of the fractional shares will be returned to the Participant from Corning.

7. DIVIDENDS

As record holder of the Plan Shares held in a Participant's account under the Plan, the Plan Administrator will (1) receive dividends on all Plan Shares held by it on each dividend record date, (2) credit such dividends to each Participant's account in proportion to the number of whole or fractional shares held in each account, and (3) automatically reinvest the dividends in shares of Stock in the manner as described in Section 6.

8. COSTS

Participants will be responsible for all fees charged by the Plan Administrator relating to withdrawal from the Plan. If a Participant requests the Plan Administrator to sell his or her Plan Shares in the event of his or her withdrawal from the Plan or otherwise, the Participant will pay the applicable brokerage commission associated with the sale of such shares, any required transfer tax, and applicable service charges. Corning will be responsible for paying all other fees charged by the Plan Administrator to administer the Plan. A Fee Schedule is attached as Exhibit A . These fees may be changed from time to time without further notice.

9. REPORTS TO PARTICIPANTS

As soon as practicable after each purchase of Stock, the Plan Administrator will mail to each Participant for whose Plan Account a transaction has occurred under the Plan a statement showing

(a) the amount of any dividend applied toward such investment,

(b) the taxes withheld, if any,

(d) the number of Plan Shares purchased,

(e) the purchase price per share, and

(f) the total Plan Shares accumulated under the Plan, computed to four (4) decimal places.

Participants will also receive, from time to time, communications sent to all record holders of the shares of common stock.

Each Participant will receive annually Internal Revenue Service information for reporting dividend and other income received. Participants are urged to consult with their tax advisor.

10. VOTING OF SHARES

Shares credited to the account of a Participant under the Plan (other than fractional shares) will be automatically added to the shares covered by the proxy sent to the shareholder with respect to his or her other shares in Corning and may be voted by such holder pursuant to such proxy. The Plan Administrator will forward any proxy solicitation materials relating to Plan Shares to the participating shareholder.

Where no instructions are received from a Participant with respect to a Participant's Plan Shares, or otherwise, such shares will not be voted unless the Participant votes such shares in person.

11. WITHDRAWAL OF SHARES IN PLAN ACCOUNTS BY ISSUANCE OF CERTIFICATES

All Plan Shares will be registered in the name of the Plan Administrator or its nominee, as agent for the Participants. Certificates in exchange for Plan Shares will not be issued to Participants unless requested in writing. Participants may withdraw all or a portion of the Plan Shares in their accounts by notifying the Plan Administrator in writing to that effect and by specifying in the notice the number of shares to be withdrawn. Certificates for any number of whole Plan Shares will be issued to a Participant within fifteen (15) calendar days of receipt of a written request to the Plan Administrator signed by the Participant. Any remaining Plan Shares will continue to be held by the Plan Administrator as the agent for the Participant. Certificates for fractional shares will not be issued under any circumstances. Any notice of withdrawal after a dividend record date will not be effective until dividends paid for the applicable Dividend Payment Date have been reinvested and the shares credited to the Participant's account.

Certificates issued to Participants will be registered in the name or names in which the Participant's account is maintained. The original Authorization Form election for Plan participation will remain in effect for the certificated shares. If a Participant requests a certificate to be registered in a name other than that shown on the account, such request must be signed by all persons in whose name the account is registered and be accompanied by such other documentation as the Plan Administrator may reasonably require.

12. SALE OF SHARES FROM PLAN ACCOUNTS

Participants may request that any or all of their Plan Shares be sold by the Plan Administrator. If such sale is requested, the sale will be made for the account of the Participant by the Plan Administrator's broker within ten business days after receipt of the request at the prevailing market price at the time of such sale. Within ten business days after the sale, the Participant will receive from the Plan Administrator a check for the proceeds of the sale less the $15 liquidation fee, any applicable brokerage commission and any transfer tax.

The signature on any request for sales in excess of $10,000 or higher must be guaranteed by a firm that is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents' Medallion Program.

13. TERMINATION OF PARTICIPATION

Participation in the Plan may be terminated by a Participant at any time by giving written notice to the Plan Administrator. Within fifteen (15) calendar days after the date on which such notice is received by the Plan Administrator, the Plan Administrator will deliver to the Participant (a) a certificate for all whole Plan Shares held under the Plan, and (b) a check representing amounts due on fractional shares based on the closing price quoted by the Nasdaq Stock Market's OTC Bulletin Board on the date prior to the date on which the termination is processed by the Plan Administrator. Corning, in its sole discretion, may at any time by notice in writing mailed to a Participant, terminate a Participant's interest in the Plan, in which case the Participant will be treated as though he had terminated participation in the Plan as of the date of mailing of the notice. In the event that the number of Plan Shares held by a Participant falls below ten (10) shares of Stock, the Plan administrator will discontinue the reinvestment of cash dividends until such time as the account has increased to the minimum number of Plan Shares.

Upon withdrawal from the Plan, the Participant may also request that all of their Plan Shares be sold by the Plan Administrator. If such sale is requested, the sale will be made for the account of the Participant by the Plan Administrator's broker within ten business days after receipt of the request at the prevailing market price at the time of such sale. Within ten business days after the sale, the Participant will receive from the Plan Administrator a check for the proceeds of the sale less the $15 liquidation fee, any applicable brokerage commission and any transfer tax.

14. STOCK DIVIDENDS, STOCK SPLITS, RIGHTS OFFERINGS

Any additional Stock resulting from a stock dividend or stock split by Corning on the Plan Shares of a Participant will be added to the Plan Account as additional Plan Shares.

In the event of a rights offering by Corning, Participants in the Plan will be notified by Corning in advance of the commencement of the rights offering. Participants should instruct the Plan Administrator to transfer whole Plan shares into their own names prior to the record date for such offering if they wish to exercise such rights. If no such instructions are received by the Plan Administrator prior to the record date for such offering, then such rights will terminate with respect to both the Participant and the Plan Administrator.

15. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

Corning, may amend, supplement, suspend, modify or terminate the Plan at any time without the approval of the Participants. Thirty (30) calendar days notice of any suspension, termination or amendment that would have a material adverse effect on the Participants' rights hereunder will be sent to all Participants, who will in all events have the right to withdraw from the Plan in accordance with Section 11 hereof.

16. INTERPRETATION OF THE PLAN

The Plan, the Authorization Form and the Participant's accounts will be governed by and construed in accordance with the laws of the State of New York and applicable state and federal securities laws. Any question of interpretation arising under the Plan will be determined by the Board of Directors of Corning pursuant to applicable federal and state law and the rules and regulations of all regulatory authorities. Such determination will be final and binding on all Participants. Corning may adopt rules and regulations at any time to facilitate the administration of the Plan.

17. RESPONSIBILITIES OF CORNING AND THE PLAN ADMINISTRATOR

Neither Corning nor the Plan Administrator will be liable for any act done in good faith or for any good faith omission to act, including, without limitation, any claim of liability arising out of (a) failure to terminate a Participant's account upon such Participants death and (b) the prices at which shares are sold, or the times when sales are made. Neither Corning nor the Plan Administrator will be liable for any consequential damages arising from any action taken or omission made in the creation and/or administration of the Plan.

Exhibit A

Fee Schedule

Dividend Reinvestment Program

Per change in account, e.g., request for periodic issuance of certificates $10.00

Per new certificate issued (if requested by participant) $10.00

Per withdrawal from or termination of account in Plan $20.00

Per sale of securities from Plan $15.00

Participants also pay the applicable brokerage commission associated with the sale of shares, any required transfer tax, and applicable service charges

Corning Natural Gas Corporation

Amendment No. 1

To

Dividend Reinvestment Plan

This Amendment No. 1 amends the Corning Natural Gas Corporation ("Corning") Dividend Reinvestment Plan (as amended, the "Plan").

WHEREAS, amended regulations issued by the U.S. Internal Revenue Service amend the record keeping and reporting requirements on cost basis for certain stock issuances and purchases, and defined "dividend reinvestment plans" for purposes of such regulation as only those which required a minimum of 10% of the dividend receivable of any participant be invested for purposes of deferring the application of such requirements for 2011; and

WHEREAS, the Board of Directors of Corning determined that it was in the best interests of Corning to amend the Plan (pursuant to Section 15) to take advantage of the deferral and determined that such amendment was not material to the participants in the Plan;

NOW, THEREFORE, Section 5 of the Plan is hereby amended, effective as of 5:00 p.m. Eastern Daylight Savings Time on December 31, 2010, by replacing the last sentence thereof with the following:

"A shareholder of record must enroll at least 10% of every dividend on the shares enrolled in the Plan and at least ten (10) shares in order to be a Participant."

NIXON PEABODY LLP

1300 Clinton Square

Rochester, New York 14604

(585) 263-1000

Fax: (585) 263-1600

June 27, 2012

Corning Natural Gas Corporation

330 W. William St.

Corning, New York 14830

Ladies and Gentlemen:

We have acted as counsel to Corning Natural Gas Corporation (the "Company"), a New York corporation, in connection with a rights offering by the Company to holders of record of its common stock, par value $5.00 per share (the "Common Stock"), of transferable subscription rights (the "Subscription Rights") entitling the holders thereof to purchase up to an aggregate of 260,000 shares of Common Stock at an exercise price of $15.75 per share at any time on or before the expiration date thereof, pursuant to a Registration Statement on Form S-3 (the "Registration Statement") filed by the Company with the Securities and Exchange Commission (the "Commission") and the prospectus contained therein (the "Prospectus").

In connection with the foregoing, we have examined (i) the Registration Statement, (ii) the Prospectus, (iii)the Restated Certificate of Incorporation of the Company, (iv) the Second Amended and Restated Bylaws of the Company, and (v) resolutions of the Board of Directors of the Company authorizing the offering and issuance of the Subscription Rights and issuance of the shares of Common Stock that may be sold by the Company upon exercise thereof and related matters. We also have examined originals or copies, certified or otherwise identified to our satisfaction, of such corporate records, certificates and other documents and have made such investigations of law as we have deemed necessary or appropriate as a basis for the opinions expressed below.

As to questions of fact material to our opinions expressed herein, we have, when relevant facts were not independently established, relied upon certificates of, and information received from, the Company and/or representatives of the Company. We have made no independent investigation of the facts stated in such certificates or as to any information received from the Company and/or representatives of the Company and do not opine as to the accuracy of such factual matters. We also have relied, without investigation, upon certificates and other documents from public officials.

In rendering the following opinions, we have assumed, without investigation, the authenticity of any document or other instrument submitted to us as an original, the conformity to the originals of any document or other instrument submitted to us as a copy, the genuineness of all signatures on such originals or copies, and the legal capacity of natural persons who executed any such document or instrument at the time of execution thereof.

Based upon and subject to the foregoing, and the other qualifications and limitations contained herein, we are of the opinion that:

The Subscription Rights have been duly authorized and, when issued, will be the valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, receivership or other laws relating to or affecting creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
The Common Stock to be sold by the Company pursuant to the Subscription Rights has been duly and validly authorized and, when issued and delivered in accordance with the Subscription Rights and the plan of distribution set forth in the Registration Statement, will be validly issued, fully paid and nonassessable.

Members of our firm involved in the preparation of this opinion are licensed to practice law in the State of New York and we do not purport to be experts on, or to express any opinion herein concerning, the laws of any other jurisdiction other than the laws of the State of New York and the federal law of the United States of America.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name as it appears under the caption "Legal Matters" in the Prospectus. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Nixon Peabody LLP

NIXON PEABODY LLP

1100 Clinton Square

Rochester, New York 14604

(585) 263-1000

Fax: (585) 263-1600

June 27 2012

Corning Natural Gas Corporation

330 W. William St.

Corning, New York 14830

Ladies and Gentlemen:

We have acted as counsel to Corning Natural Gas Corporation (the "Company"), a New York corporation, in connection with an offering by the Company to holders of record of its common stock, par value $5.00 per share (the "Common Stock"), of transferable subscription rights (the "Subscription Rights") entitling the holders thereof to purchase up to 260,000 shares of Common Stock, pursuant to a Registration Statement on Form S-3 (the "Registration Statement") filed by the Company with the Securities and Exchange Commission (the "Commission") and the prospectus contained therein (the "Prospectus").

In connection with the foregoing, we have examined (i) the Registration Statement, (ii) the Prospectus, (iii) the Restated Certificate of Incorporation of the Company; (iv)　the Second Amended and Restated Bylaws of the Company; and (v) resolutions of the Board of Directors of the Company authorizing the offering and issuance of the Subscription Rights and the shares of Common Stock to be sold by the Company and related matters. We also have examined originals or copies, certified or otherwise identified to our satisfaction, of such corporate records, certificates and other documents and have made such investigations of law as we have deemed necessary or appropriate as a basis for the opinions expressed below.

Based upon and subject to the foregoing, and the other qualifications and limitations contained herein and in the Prospectus, the discussion set forth in the Registration Statement under the caption "SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSEQUENCES", insofar as it expresses conclusions as to the application of United States federal income tax law, is our opinion as to the material federal income tax consequences to shareholders of the Company which are recipients of the Subscription Rights and purchasers of the Common Stock pursuant to the Subscription Rights.

The opinion expressed herein is based upon our interpretation of current provisions of the Internal Revenue Code of 1986, as amended, and existing judicial decisions, administrative regulations, and published rulings and procedures. Our opinion is not binding upon the Internal Revenue Service or courts and there is no assurance that the Internal Revenue Service will not successfully challenge the conclusions set forth therein. No assurance can be given that future legislative, judicial or administrative changes, on either a prospective or retrospective basis, would not adversely affect the accuracy of the conclusions stated herein. We express no opinion other than as to the federal income tax law of the United States of America. This opinion does not address any state, local or foreign tax consequences that may result from the transactions contemplated by the Registration Statement.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name as it appears under the caption "Legal Matters" in the Prospectus. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section　7 of the Securities Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Nixon Peabody LLP

LINE OF CREDIT NOTE

* * * * * * * * * *

NAME: CORNING NATURAL GAS CORPORATION	NOTE DATE: September 1, 2011________________
ADDRESS: 330 William Street	NOTE MATURITY:_ August 31, 2012
Corning, New York 14830______________________	NOTE NUMBER:7002029533___________________
	ACCOUNT NUMBER:

$750,000.00

FOR VALUE RECEIVED, the undersigned, CORNING NATURAL GAS CORPORATION , an entity organized and existing under the laws of the State of New York with an office at 330 William Street, Corning, New York 14830, (hereinafter called "Borrower"), promises to pay pursuant to the repayment terms set forth below, to the order of FIVE STAR BANK , a New York State bank (hereinafter called "Bank") with its principal office at 55 North Main Street, Warsaw, New York 14569, or at such other place as may be designated in writing by the holder of this Note the sum of Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00) in lawful money of the United States, or so much as may be advanced, referred to as "principal sum", with interest hereon to be computed from the date hereof as follows:

From the date hereof through and including August 31, 2012 (the "Maturity Date") the unpaid

principal sum shall bear interest at the rate of 4.25 percent per annum (the "Fixed Rate")

Payment Terms.

Commencing on November 1, 2011 and on the 1st day of each month thereafter through and including the Maturity Date, the Borrower shall pay to Bank twelve (12) payments of interest only. Unless sooner accelerated or demanded under the term thereof, the Borrower shall pay all unpaid principal, interest and any costs hereunder to the Bank on the Maturity Date.

The annual interest rate for this Note shall be computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Bank at Bank's address shown above or at such other place as Bank may designate in writing.

Application of Payment. All payments of principal and accrued interest shall be applied to the indebtedness under this Note in a manner and order acceptable to the Bank, in its sole discretion.

After Acceleration or Maturity (whichever is earlier), interest shall accrue on the unpaid principal balance of this Note at a rate 3% per annum greater than the pre-Acceleration or pre-Maturity interest rate, until this Note is paid in full. In no event however, shall the interest rate on this Note exceed the maximum rate allowed by law.

In the event any payment due hereunder shall remain unpaid for more than ten (10) days, the holder hereof may collect a late charge in the greater of four percent (4%) of said payment, or $50.00 to cover its extra handling expenses.

Any payment made with a check which is dishonored shall be subject to a dishonored check charge in the amount required by the Bank. The Bank may require this to be paid immediately or it may be added to the balance of the loan or withdrawn from the account.

Purpose. The loan proceeds will be used for the following purpose(s): Refinance Five Star Bank Term Loan _____

Covenants.

Loans made pursuant to this Note are conditioned upon the prior approval of Bank in its sole and absolute discretion. Requests for Bank approval of a loan may be instituted at any time prior to the date that Bank or Borrower terminates this Note, or prior to the time at which Bank demands payment of the Consolidated Loan (defined below), whichever date is earlier. A loan request by Borrower which Bank approves, is referred to below as an "Approved Request". The fact that a particular loan request is not approved by Bank, shall have no affect on (a) this Note, (b) the right of Borrower to make subsequent loan requests, or (c) the obligations of Borrower under this Note including but not limited to the obligations to pay the Consolidated Loan in full On Demand.

Bank shall process an Approved Request by debiting Borrower's revolving loan account for the amount of the Approved Request and, unless otherwise agreed by Bank and Borrower, by crediting Borrower's checking account identified above with Bank with the amount of the Approved Request. The loan shall be deemed made immediately upon the crediting of the amount of the Approved Request to Borrower's checking account with Bank or otherwise making the amount of the Approved Request available to Borrower. Each Approved Request, together with the unpaid principal balance of previous loans made under this Note, shall be deemed automatically refinanced and consolidated into one (1) loan, hereafter called the "Consolidated Loan".

Loan requests may be issued by Borrower in writing, in person over the telephone and via fax and via e-mail by an Authorized Person designated below. Borrower may, from time to time, add to or delete from the list of Authorized Persons by giving Bank written notice of such changes. Notice of any additions or deletions shall be sent to Bank at 55 North Main Street, Warsaw, New York 14569, to the attention of Commercial Loan Department.

Bank is authorized to act on telephone, written, fax or e-mail loan requests and prepayment instructions of any person identifying himself as an Authorized Person, and Borrower will be bound by such instructions. Borrower hereby indemnifies and holds Bank harmless from any liability (including reasonable attorneys' fees) which may arise as a result of Bank's good faith reliance on telephone loan requests and or payment or prepayment instructions from any person identifying himself as an Authorized Person.

Bank may terminate its obligations under this Note at any time upon telephonic, facsimile or written notice to Borrower at Borrower's address specified above. Borrower may terminate its right under this Note at any time upon written notice given to Bank at Bank's address specified above. The termination of this Note by either or both parties shall not effect Borrower's obligations under this Note (including but not limited to Borrower's obligations to pay accrued interest on the unpaid principal balance of the Consolidated Loan and the obligation to pay the Consolidated Loan on demand), nor Bank's rights against Borrower under this Note until the Consolidated Loan (and all accrued interest due and to become due Bank thereon) is paid in full.

Each of the persons whose name appears below, (followed by his or her signature) is an "Authorized Person". Any Authorized Person may make loan requests under this Note and give payment or prepayment instructions, as specified above.

Upon the occurrence of any of the following, Borrower shall be in default. Upon the occurrence of a default, Bank may declare the entire unpaid principal balance of this Note immediately due and payable ("Acceleration"), without notice, presentment, demand or protest of any kind, all of which are hereby waived by Borrower.

Borrower's failure to make any payment to Bank under this Note when due.

Borrower's failure (or the failure of any Borrower, if more than one Borrower signed this Note) or of any other person or entity liable to Bank for payment of the indebtedness evidenced by this Note ("Guarantor"), to perform or comply with any term or provisions or covenant under any other loan documents executed by Borrower or Guarantors in favor of Bank.

Falsity of any representation or warranty contained in any loan document executed by Borrower in favor of Bank.

Entry of a judgment and/or filing of a federal tax lien against any Borrower and/or against any Guarantor.

Commencement of a bankruptcy proceeding by or against any Borrower and/or by or against any Guarantor.

If Borrower is a corporation, limited liability company or partnership, the dissolution, merger, consolidation or failure to maintain itself as corporation, limited liability company or partnership in good standing.

Death of any individual Borrower and/or of any individual Guarantor.

The making by any Borrower and/or by any Guarantor of a bulk sale or other disposition of substantially all of its assets.

Insolvency (in the form of a negative net worth as defined under generally accepted accounting principles) of any Borrower and/or of any Guarantor.

A material adverse change or deterioration in the financial condition of the Borrower.

Bank receives notice from any Guarantor of the discontinuance of his liability to Bank.

Discontinuance of any Borrower's business and/or of any corporate Guarantor's business.

Repossession of or the appointment of a receiver or custodian for any property of any Borrower and/or of any Guarantor.

Failure of Borrower to comply with any financial covenant or supply accurate and timely financial information as required herein.

In the event this Note is referred to an attorney for collection, Borrower shall pay all Bank's costs of collection, including Bank's reasonable attorneys' fees, incurred and to be incurred in connection with the enforcement and collection of this Note, including, but not limited to, attorneys' fees incurred and to be incurred in any bankruptcy proceeding involving Borrower or any Guarantor, if any, of this Note.

The Borrower agrees so long as this loan remains unpaid to: (a) keep proper books of accounts in a manner satisfactory to the Bank; (b) permit inspections and audits by the Bank of all books, records, and papers in custody or control of Borrower or others, relating to Borrower's financial condition, including the making of copies thereof, and abstracts therefrom, and inspection and appraisal of any of Borrower's assets; (c) submit timely and accurate financial information to the Bank, acceptable in form and content to the Bank, in its sole discretion, which financial information must include (i) for entity Borrowers and Guarantors, annual audited or reviewed or compiled financial statements prepared by an independent Certified Public Accountant within one hundred twenty (120) days after each fiscal year-end and copies of federal tax returns with all schedules, and (ii) for individual Borrowers and Guarantors, personal financial statements and copies of federal tax returns with all schedules, and (iii) Bank may also require interim management prepared financial statements provided on a quarterly basis, updated rent rolls and other financial information, and (iv) any other periodic financial statements reasonably requested within thirty (30) days after requested by Bank; (d) promptly pay all taxes, assessments, and other governmental charges, provided however, that nothing herein contained shall be interpreted to require the payment of any such tax so long as the validity is being contested in good faith; (e) keep all of its property so insurable insured at all times with responsible insurance carriers against fire and other hazards in such manner and to the extent that like properties are usually insured by others operating businesses, plants and properties of similar character in the same general locality, and keep adequately insured at all times with responsible insurance carriers against liability on account of damage to persons or property, and under all applicable worker's compensation laws; and (f) promptly inform the Bank of the commencement of any action, suit, proceeding or investigation against Borrower, or the making of any counterclaim against Borrower in any action, suit or proceeding, and of all liens against any of its property. In addition to other remedies provided under the loan documents executed in connection with this loan, the Bank reserves the right to (i) require Borrower and/or Guarantor to pay the Bank $250.00 for each thirty (30) days the financial information is past due, and/or (ii) charge the default rate of interest under this Note until the required financial information has been submitted to and approved by Bank, in its sole discretion.

This Note is governed by New York law. BORROWER WAIVES THE RIGHT TO A JURY TRIAL IN ANY LITIGATION OF ANY NATURE OR KIND IN WHICH BORROWER AND BANK ARE BOTH PARTIES. Any litigation involving this Note shall, at Bank's option, be triable only in a court located in Wyoming County, New York. Borrower acknowledges that it has transacted business in New York State with regard to this Note.

The failure of any person or entity to sign this Note shall not release, discharge or affect the liability of any person or entity that signs this Note. This Note has been unconditionally delivered to Bank by each person or entity that signs this Note.

Security and Setoff. As security for this Note, and any renewal or extension hereof, and for all other obligations, direct or contingent, of Borrower to Bank, now due or to become due whether now existing or hereafter arising, (this Note and such other obligations being herein referred to as the "Obligations"), Borrower gives Bank a security interest in all funds, deposits and other property, and the proceeds thereof, now or hereafter in the possession or control of Bank for the account of Borrower ( the "Deposits"). Bank may at its option and at any time(s), with or without notice to Borrower, set off or realize upon any and all Deposits, and apply them to the payment or reduction of all or any of the Obligations (whether or not then due), in such manner as Bank may determine, in its sole discretion. Bank shall not be obligated to assert or enforce any rights under this paragraph or to take any action in reference thereto, and Bank may in its discretion at any time(s) relinquish its rights under this paragraph as to a particular Deposit without thereby affecting or invalidating its rights as to any other Deposit. The Bank's right of setoff applies to all accounts and deposits held at the Bank or any other bank owned by Five Star Bank.

This Note may not be modified or terminated orally. Borrower acknowledges that this Note has been executed for commercial and/or business purposes. If more than one Borrower has signed this Note, all obligations of each Borrower under this Note are joint and several. Wherever used in this Note, neutral pronouns shall include the masculine and feminine gender as appropriate in the context, and singular terms (such as "Borrower") shall be deemed in the plural where appropriate.

Borrower represents and warrants to Bank that no adverse change has occurred in either (i) Borrower's or Guarantor's financial condition since the date of Borrower's loan application to Bank or (ii) the collateral being pledged to the Bank to secure the Bank's loan. In addition, Borrower hereby agrees to fully, unconditionally and expeditiously comply with any post closing issues or requirements of the Bank, including, but not limited to furnishing additional documents or executing additional or corrected documents in favor of the Bank.

It is hereby expressly agreed, that all of the covenants, conditions and agreements contained in the Mortgage or Security Agreement securing this Note or other loan documents, as applicable, are hereby made part of this Note.

Each of the persons whose name and signature appears on the attached Addendum is an "Authorized Person". Any Authorized Person may make loan requests under this Note and give prepayment instructions, as specified above.

Presentment for payment, notice or dishonor, protest and notice of protest are hereby waived.

Borrower Name:

CORNING NATURAL GAS CORPORATION

Signature:

____________________________________________

Print Name and Title:

Michael German, CEO_________________________

Borrower Name:

CORNING NATURAL GAS CORPORATION

Signature:

____________________________________________

Print Name and Title:

Firouzeh Sarhangi, CFO________________________

Witness: __________________________

William E. Bacon, Vice President

Five Star Bank

ADDENDUM TO LINE OF CREDIT NOTE 7002029533

IN THE AMOUNT OF $ 750,000.00

DATED SEPTEMBER 01, 2011

Each of the persons whose name and signature appears on this Addendum is an "Authorized Person". Any Authorized Person may make loan requests under this Note and give payment instructions, as specified above.

Michael German	__________________________________________
Name of Authorized Person	Signature of Authorized Person
Firouzeh Sarhangi	__________________________________________
Name of Authorized Person	Signature of Authorized Person
__________________________________________	__________________________________________
Name of Authorized Person	Signature of Authorized Person
__________________________________________	__________________________________________
Name of Authorized Person	Signature of Authorized Person

SETTLEMENT AND RELEASE AGREEMENT

This SETTLEMENT AND RELEASE AGREEMENT (this "Agreement") made

as of December 30, 2011 is entered into by and between Thomas K. Barry ("Plaintiff') and Corning Natural Gas Corporation ("CNG") ("Defendant").

WITNESSETH:

WHEREAS, in 2007, Plaintiff commenced an action ("the Key Man Action") against the Defendant In the United States District Court for the Western District of New York entitled Thomas K. Barry v. Corning Natural Gas Corporation, 6:07-CV-6388; and

WHEREAS, in 2010, Plaintiff commenced an action ("the Deferred Compensation Action") against the Defendant in the United States District Court for the Western District of New York entitled Thomas K. Barry v. Corning Natural Gas Corporation , IO-CV-6695;
(hereafter the Key Man Action and the Deferred Compensation Action may be collectively referred tons "the Actions.")

WHEREAS, the parties hereto desire to resolve and settle all disputes and controversies between and amongst them, including all disputes related to the Actions;

NOW THEREFORE , in consideration of the foregoing, and the mutual promises and warranties set forth herein, the parties, intending to be legally bound, do hereby agree as follows:

1. No Admission of Liability . This Agreement shall not in any way he
construed as an admission by any party hereto that all or any of then has any liability, or has acted negligently or wrongfully in any manner toward, or has caused any damages to, the other.

2. Settlement Obligations.

(a) On or before January 15, 2012, Defendant, Corning Natured Gas Corporation shall pay $285,000 to Thomas K. Barry. The $285,000 shall consist of $228.000 for past due deferred compensation payments and $57,000 to reimburse Thomas K. Barry for his legal fees.

(b) Starting January 5, 2013, CNG shall pay Thomas K. Barry $40,000, plus interest at 4%, compounded annually, on or before January 5 of each year, for the longer of ten years or Thomas K. Barry's lifetime. By way of example, CNG shall pay Thomas K. Barry $40,000 on or before January 5, 2013, $41,600 on or before January 5, 2014 and $43,264 on or before January 5, 2015, with payments continuing as set forth above.

(c) CNG will provide Thomas K. Barry a $500,000 term life insurance policy effective January 5, 2012, and continuing through January 5, 2031 provided that CNG can obtain the policy for less than $15,000 in annual premiums. In the event CNG cannot with reasonable effort obtain such a policy, CNG shall pay Mr. Barry $15,000 per year, on or before January 5th of each year until Mr. Barry dies, but in no event shall CNG make fewer than ten such payments or more than 20 such payments to Mr. Barry or his estate (i.e. guaranteed 10 annual payments.

(d) The parties shall keep the terms of this settlement Agreement confidential provided that the parties to this Agreement shall make such disclosures by law, including to the New York State Public Service Commission and the Securities and Exchange Commission, and shall be entitled to disclose the terms of this Agreement to their legal counsel and financial advisors. The sole remedy for any violation of this confidentiality provision shall be injunctive relief.

(e) This agreement is subject to approval by CNG's board of directors. This agreement shall be presented to the Board on or before December 13, 2011 for its consideration.

(f) CNG shall provide Thomas K. Barry with Medicare supplement coverage including a prescription rider under the same coverage terms of other CNG retirees at no cost to Thomas K. Barry and at CNG's cost for-the remainder of Mr. Barry's life, commencing January 1, 2012. In the event the Company terminates post retirement Medicare supplemental coverage including a prescription rider, the Company will acquire for Thomas Barry a policy providing those same benefits as they existed as of the date of this Agreement. If such coverage is not available, the Company will obtain a policy providing coverage that is as close as possible to the coverage provided retirees today.

(g) CNG shall provide Susan Skrocki Barry with single person coverage under CNG's health insurance plan at CNG's cost and at no cost to Susan Barry, commencing January 1, 2012 for the remainder of Susan Barry's life, provided, however that once she reaches age 65 or becomes eligible for Medicare, CNG will pay Medicare Supplemental and prescription rider premiums for her and shall stop providing her the Company's single person health plan coverage for her at that time. In the event the Company terminates single person coverage under the Company's Health insurance plan before Susan Barry reaches age 65 or becomes eligible for Medicare, the Company will acquire for Susan Barry a policy providing until she reaches age 65 or becomes eligible for Medicare those same benefits as they existed as of the date of this Agreement. If such coverage is not available, the Company will obtain a policy providing until she 'reaches age 65 or becomes eligible for Medicare, coverage that is as close as possible to the single person coverage provided under the Company's health insurance plan as of today.

(h) The parties shall discontinue the Actions with prejudice upon the execution of this final settlement Agreement

(i) It is the intent of this Agreement to finally resolve all Issues and disputes between the parties.

(j) Upon Plaintiff's Counsels' receipt of the final executed settlement
Agreement, Plaintiff's Counsel shall file notices of dismissal with prejudice: in both Actions pursuant to Rule 4i (a)(1)(t) of the Federal Rules Civil Procedure dismissing the Actions with prejudice. Such notices of dismissal shall explicitly state that each Action is being dismissed with prejudice.

3, General Releases. Subject to full payment of the Settlement Payment in
paragraph 2 above, and subject to fulfillment of all of the terms, and conditions set forth in this Agreement, Thomas K. Barry on behalf of himself and his affiliates, agents, representatives, heirs, executors, attorneys, successors and assigns, releases and forever discharges CNG and each of its insurers, branches, affiliates, subsidiaries, parents, members, shareholders, agents, officers, managers, directors, representatives, heirs, executors, attorneys, successors and assigns, from any and all liabilities, charges, claims, causes of action or suits of whatever kind of nature, absolute, contingent, unliquidated or otherwise, including, but not limited to, any rights, obligations or claims arising out of or related to the Actions, which liabilities, charges, claims, causes of action or suits Thomas K. Barry and/or his affiliates, agents, representatives, heirs, executors, attorneys, successors and assigns can, shall or may have against Defendant or its affiliates, members, agents, officers, managers, representatives, heirs, executors, attorneys, employees, successors and assigns for, upon or by reason of any matter, cause or thing whatsoever, occurring from the beginning of the world through the date of this Agreement. Specifically, without limitation, the foregoing release shall include and apply to any rights and/or claims; (i) arising under any contract, express or implied, written or oral; (ii) for tort, tortuous or harassing conduct, infliction of mental distress, interference with contract, fraud, libel or slander; and (iii) for damages, including without limitation, punitive or compensatory damages, or for attorneys' fees, expenses, costs, wages, injunctive or equitable relief.

CNG and each of its branches, affiliates, subsidiaries, parents, agents, in their capacity as agents, officers and managers in their capacities as officers and managers, directors in their capacity as directors, representatives, successors and assigns, in exchange for Thomas K. Barry's execution of this Agreement, hereby release Thomas K. Barry, his heirs, executors. administrators, spouse, agents and representatives from any and all claims, demands, disputes, causes of action, contracts, promises, damages, expenses, lawsuits and attorneys' fees of any kind, whether contingent or liquidated, and whether in tort, contract or in equity, which CNG now has or which hereafter may accrue on account of any known or unknown event which occurred prior to the execution of this Agreement.

The Parties agree that these are universal mutual releases which ate intended to he construed as broadly as possible.

4. Amendments . No amendments, modifications or variations of the terms of this Agreement shall be valid unless made in writing and executed by all parties hereto.

5. Agreement Construction. The parties hereto have each participated in the drafting of this Agreement with the assistance of their respective counsel, Therefore, the language of this Agreement shall not be presumptively construed either in favor or against any of the parties hereto.

6. Representations and Warrantees . The parties, by and through their authorized agents and representatives, hereby represent and warrant to each other that they are the sole owners of all the claims, rights, counts, causes of action, obligations, debts and demands which are intended to he released by the parties pursuant to this Agreement and which are in fact released by the parties pursuant to this Agreement and that no other persons or entities have any interest, by assignment, in any of the claims, rights, counts, causes of action, obligations, debts and demands referred to herein. Further, the parties, by and through their authorized agents and representatives, represent and warrant that they have the authority on behalf of the parties and do hereby make this Agreement and release the claims, rights, counts, causes of action, obligations. debts and demands referred to herein,

7. Counterparts. This Agreement may be executed via facsimile or other
electronic transmission in any number of counterparts and by the separate parties in separate counterparts, each of which shall be deemed to constitute an original and all of which shall be deemed to constitute the one and the same instrument.

8. Entire Agreement. The Agreement is an integrated Agreement, containing the entire understanding among the parties regarding the matters addressed herein, and except as set forth in this Agreement, no representations, warranties or promises have been made or relied upon by the parties to this Agreement. The Agreement shall prevail over prior communications regarding the matters addressed herein,

9. Successors and Assigns. This Agreement shall be binding in all respects on the parties' successors and assigns. Except, as expressly set forth herein, no party hereto shall assign any of their rights or obligations under this Agreement.

10. Severabilty. A finding of invalidity as to any provision or section of this Agreement shall only void that provision or section and no other, and this Agreement shall he construed as if the invalid provision or section thereof were not contained in this Agreement

11. Performance . The parties hereto agree to execute all documents and to do all things necessary or appropriate to fully effectuate the terms of this Agreement.

12. Headings . Section headings contained herein are for purposes of organization only and shall not constitute part of this Agreement.

13. Governing Law, Jurisdiction: Service of Process . This Agreement shall be governed by the laws of the State of New York, without regard to its conflicts of law principles. Any action or proceeding seeking to enforce any provision of or based on any right arising out of, this Agreement may be brought against any of the parties in the courts of the State of New York, or it has or can acquire jurisdiction, in the United States District Court for the Western District of New York, and each of the parties consents to the jurisdiction of such courts (and the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may he served on any party anywhere in the world.

IN WITNESS WHEREOF the parties have affixed their signatures hereto as of the date set forth in the preamble

CORNING NATURAL GAS CORPORATION

By: Date:

Michael I. German

By: /S/ Thomas K. Barry Date: 12/30/2011

Thomas K. Barry

OPERATING AGREEMENT

of

LEATHERSTOCKING PIPELINE COMPANY, LLC

THIS OPERATING AGREEMENT is entered into and shall be effective as of September 30, 2010 by and among Leatherstocking Pipeline Company, LLC , a New York limited liability company with an address of 330 West Williams Street, P.O. Box 58, Corning, New York 14830 (the " Company ") and Mirabito Regulated Industries, LLC a New York corporation with an address of The Metrocenter, 49 Court Street, P.O. Box 5306, Binghamton, New York 13902 (" MRI ") and Corning Natural Gas Corporation a New York corporation with an address of 330 West Williams Street, P.O. Box 58, Corning, New York 14830 (" CNG ") (each a " Member " and collectively, the " Members ").

WHEREAS , the parties desire to form a limited liability company on the terms and conditions herein contained.

NOW, THEREFORE , in consideration of the mutual promises, covenants and conditions herein contained and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

SECTION 1

DEFINITIONS

Unless defined elsewhere in this Agreement, the capitalized terms used in this Agreement shall have the meanings set forth below. The capitalized terms defined below or used elsewhere in this Agreement shall be deemed to refer to the singular or plural as the context requires:

" Accountants " means such firm of independent certified public accountants as shall, from time to time, be engaged by the Managers on behalf of the Company to render accounting, auditing, tax and similar services.

" Act " means the Limited Liability Company Act of the State of New York as set forth in Chapter 34 of the Consolidated Laws of the State of New York as the same may be amended from time to time (or any corresponding provisions of succeeding law).

" Adverse Act " means, with respect to any Member, any of the following:

(a) a Transfer of all or any portion of such Member's interest in the Company except as expressly permitted or required by this Agreement;

(b) an Event of Bankruptcy occurring with respect to any Member; or

(c) any other occurrence or transaction that is expressly provided elsewhere in this Agreement as constituting an Adverse Act.

" Affiliate " means with respect to any Person: (i) any Person directly or indirectly controlling, controlled by or under common control with such Person; (ii) any Person owning or controlling ten percent (10%) or more of the outstanding voting securities of such Person; (iii) any officer, director, or general partner of such Person; or (iv) any Person who is an officer, director, general partner, trustee or holder of ten percent (10%) or more of the voting securities of any Person described in clauses (i) through (iii) of this sentence.

" Agreement " means this Operating Agreement as the same may be subsequently amended from time to time. Words such as "herein," "hereinafter," "hereof," "hereto," and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires.

" Assignee " means a Person who is a transferee of all or part of a Member's interest in the Company which Person is not admitted as a Substituted Member. " Assignees " means all such Persons.

" Business " means the business and operations of the Company, including the property thereof, both real and personal, tangible and intangible, as the same may from time to time be conducted and owned in accordance with the terms and conditions of this Agreement.

" Capital Account " means the capital account maintained for a Member or Assignee, as adjusted pursuant to this Agreement and Section 1.704-1(b) of the Regulations.

" Capital Contribution(s) " means the Members' initial contributions to the capital of the Company, as set forth in Section 3.2 hereof, and any additional contributions to the capital of the Company pursuant to this Agreement.

" Change in Control " means with respect to a Member, the occurrence of any of the following events: (a) any consolidation or merger of a Member with or into any other entity in which the holders of a Member's outstanding voting equity interests immediately before such consolidation or merger do not, immediately after such consolidation or merger, retain equity interests representing a majority of the voting power of the surviving entity or stock representing a majority of the voting power of an entity that wholly owns, directly or indirectly, the surviving entity; (b) the sale, transfer or assignment of outstanding voting equity interests in a Member representing a majority of the voting power of a Member to an acquiring party; or (c) the sale of all or substantially all of a Member's assets.

" Code " means the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law).

" Company " means the limited liability company formed pursuant to this Agreement and the limited liability company continuing the business of this Company in the event of dissolution as herein provided.

" Event of Bankruptcy " means, with respect to any Member or the Company, any of the following:

(a) filing a voluntary petition in bankruptcy or for reorganization or for the adoption of an arrangement under the Bankruptcy Code (as now or in the future amended) or an admission seeking the relief therein provided;

(b) making a general assignment for the benefit of creditors;

(d) in the case of the filing of an involuntary petition in bankruptcy, the entry of an order for relief;

(e) the entry of a court order appointing a receiver or trustee for all or a substantial part of such Person's property without such Person's consent; or

(f) the assumption of custody or sequestration by a court of competent jurisdiction of all or substantially all of such Person's property.

" Fair Market Value " means the Fair Market Value of the Company established by a vote of eighty percent (80%) the Members at the annual meeting to be held in accordance with Section 8.1 hereof. If no value is established, or if the most recent valuation is more than two (2) years old, Fair Market Value shall mean that value as may be mutually agreed to by the Member (or his personal representative, as the case may be) who is offering or is deemed to be offering to sell his Interest pursuant to Section 9 hereof (the " Offering Member "), on the one hand, and the Company, on the other hand. If the Offering Member and the Company are unable to mutually agree upon a fair market value within twenty (20) days from the date the Offering Member shall have offered (or have been deemed to have automatically offered) the Interest for sale, the Fair Market Value shall be determined as follows: the Offering Member, on the one hand, and the Company, on the other hand, shall each have the opportunity to appoint, at his or its own cost, a "Qualified Appraiser" (as herein defined), within ten (10) days following the expiration of the twenty (20) day period set forth above. If either party shall fail to appoint a Qualified Appraiser within this ten (10) day period, the one Qualified Appraiser so appointed shall unilaterally establish the Fair Market Value. If both parties appoint a Qualified Appraiser within this ten (10) day period, the one Qualified Appraisers so appointed shall unilaterally establish the Fair Market Value. If both parties appoint a Qualified Appraiser within this ten(10) day period, the two Qualified Appraosers shall each report their findings of the Fair Market Value within thirty (30) days of the appointment of the latter of them. If the higher of the two values found by the two Qualified Appraisers is within one hundred five percent (105%) of the lower value, the two values shall be averaged and that value shall be deemed the Fair Market Value. If the high value is more than one hundred five percent (105%) of the lower value, the two Qualified Appraisers shall together not later than the thirtieth (30th) day after the reports, appoint a third Qualified Appraiser. The third Qualified Appraiser shall report his finding of Fair Market Value within thirty (30) days of his appointment. In such event, the Fair Market Value, shall be the value which falls in the middle of the three (3) values so reported. In determining the Fair Market Value, no consideration shall be given by the Qualified Appraiser(s) to any proceeds in excess of the cash surrender value of any insurances proceed to be received by the Company and/or of its subsidiaries as the result of the death of a member or any discount for minority interest or lack of marketability. The determination of the Qualified Appraiser(s) shall be binding and conclusive on the parties absent a showing of gross error or fraud. The cost and expenses of the third Qualified Appraiser shall be borne equally between the parties.

" G.A.A.P. " means generally accepted accounting principles as used by the Financial Accounting Standards Board and/or the American Institute of Certified Public Accountants consistently applied and maintained throughout the periods indicated.

" Losses " means the Company's losses and deductions, as determined by the Accountants in accordance with G.A.A.P. consistently applied from year to year employed under the method of accounting adopted by the Company, and a reported separately or in the aggregate, as appropriate, on the Company's tax return filed for federal income tax purposes.

" Managers " means (i) initially the Managers described in Section 6.1 of this Agreement; and (ii) any successor Managers duly appointed pursuant to this Agreement.

" Members " means all individuals or entities set forth in Section 3.1 hereof and any Person subsequently admitted to the Company as a Member pursuant to the terms hereof. " Member " means any one of the Members. All references in this Agreement to a majority in interest or a specified percentage of the Members shall mean Members holding more than fifty percent (50%) or such specified percentage, respectively, of the Membership Percentages then held by all Members.

" Membership Percentage " means those percentages with respect to each Member (or Assignee) as set forth in Section 3.1 hereof. " Membership Percentages " means the total percentages set forth in Section 3.1 hereof. In the event any interest in the Company is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Membership Percentage of the transferor to the extent it relates to the Transferred interest.

" Net Available Cash " means the gross cash proceeds of the Company whether from Company operations, sales or other dispositions or refinancings of Company assets, less the portion thereof used to pay or establish reserves for all Company expenses, debt payments, capital improvements, replacement and contingencies, all as determined by the Managers. "Net Available Cash" shall not be reduced by depreciation, amortization, cost recovery deductions or similar allowances, but shall be increased by any reductions of reserves previously established.

" Person " means any individual, partnership, limited liability company, corporation, trust or other entity.

" Profits " means the Company's income and gains, as determined by the Accountants in accordance with G.A.A.P. consistently applied from year to year employed under the method of accounting adopted by the Company, and a reported separately or in the aggregate, as appropriate, on the Company's tax return filed for federal income tax purposes.

" Property " means the property, both real, personal, tangible and intangible owned by the Company together with such additional property as may be hereafter acquired by the Company.

" Qualified Appraiser " means any professional appraiser or certified public accountant that is qualified by experience and ability to appraise assets and businesses similar to that owned or being conducted by the Company.

" Regulations " means the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

" Substituted Member " means a transferee of an Interest who has been admitted to the Company as a Substituted Member in accordance with Section 9 of the Agreement.

" Tax Allocations " means allocations, adjustments or other modifications to a Member's Capital Account in compliance with the Code and the Regulations.

" Transfer " means, as a noun, any transfer, sale, pledge, hypothecation, or other disposition, whether voluntary, involuntary or by operation of law, and, as a verb, to transfer, sell, pledge, hypothecate or otherwise dispose of in any manner whatsoever, whether voluntarily, involuntarily or by operation of law.

SECTION 2

THE COMPANY

Formation . The parties hereby agree to form a limited liability company pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement.

Name . The name of the Company shall be Leatherstocking Pipeline Company, LLC, a New York limited liability company, and all business of the Company shall be conducted in such name. The Company shall hold all of its assets and property in the name of the Company and not in the name of any Member.

Purpose . The purpose of the Company shall be to operate the Business and to engage in such other activities as the Managers deem advisable. The Company shall have the power to enter into all transactions which are provided for in this Agreement and as may be necessary or incidental to accomplish or implement the purpose of the Company including such powers as may be authorized by this Agreement or permitted under the Act but in all events consistent with the terms, conditions and restrictions set forth in this Agreement.

Principal Place of Business . The principal place of business of the Company shall be 330 West Williams Street, P.O. Box 58, Corning, New York 14830 or at such other place as the Managers shall determine.

Term . The term of the Company shall be perpetual unless the Company is dissolved earlier as set forth in this Agreement.

Filings . The Articles of Organization of the Company (the " Certificate ") have been filed in the office of the New York State Department of State in accordance with the provisions of the Act. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of New York and shall cause amendments to the Certificate to be filed whenever required by the Act. Such amendments may be executed by the Managers.

SECTION 3

MEMBERS; CAPITAL CONTRIBUTIONS

Members . The names and addresses of the Members are set forth in the first paragraph hereof. Such Persons shall be admitted to the Company as Members effective as of the date hereof. The Members shall have the following Membership Percentages:

MRI 50%

CNG 50%

Capital Contributions . Each Member shall contribute $5,000 to the Company as its initial Capital Contribution.

Additional Capital Contributions . Additional Capital Contributions shall be made by the Members from time to time whenever the Managers determine such additional contributions are so required. Such additional Capital Contributions shall be made in proportion to the Membership Percentages then held by each Member. Failure of any Member to contribute an additional Capital Contribution pursuant to this Section 3.3 shall, upon unanimous consent of the remaining Members, be deemed an Adverse Act.

Capital Accounts . The Company shall establish and maintain Capital Accounts for each Member and each Assignee pursuant to this Section 3.4 and Regulation Section 1.704-1(b). The initial Capital Account of each Member shall be the initial Capital Contribution of such Member. Such Capital Account shall be increased by (i) the amount of any additional Capital Contributions of such Member to the Company under Section 3.2 hereof; and (ii) such Member's allocable share of Profits pursuant to Section 4.1 hereof. Such Capital Account shall be decreased by (i) the amount of Net Available Cash distributed to the Member by the Company pursuant to Section 5 hereof; and (ii) such Member's allocable share of Losses pursuant to Section 4.2 hereof.

Return of Capital Contributions . Except as otherwise provided in this Agreement, no Member shall be entitled to have his Capital Contribution returned to him. Under circumstances requiring a return of any Capital Contributions, no Member shall have the right to receive Property other than cash except as may be specifically provided herein. Except as otherwise required in the Act or this Agreement, no Member shall have any liability to restore all or any portion of a deficit balance in his Capital Account.

Interest . No Member shall receive any interest, salary or drawing with respect to his Capital Contribution or his Capital Account (as defined below) or for services rendered on behalf of the Company or otherwise in his capacity as a Member, except as otherwise provided in this Agreement.

Limited Liability . The Members shall not be liable for the debts, liabilities, contracts or any other obligations of the Company. Except as otherwise provided by applicable state law and this Agreement, a Member shall be liable only to make his Capital Contributions and shall not be required to lend any funds to the Company or, after his Capital Contributions have been paid, to make any additional Capital Contributions to the Company. No Member shall have any personal liability for the repayment of any Capital Contributions of the other Member; provided, however, nothing in this Section 3.7 shall be deemed to relieve the Members of any liability resulting from their bad faith, intentional misconduct, knowing violation of law and/or breach of any fiduciary duty.

Loans . Any Member or any Affiliate of a Member may, with the approval of the Managers, lend or advance money to the Company. If any Member or Affiliate thereof shall make any loan or loans to the Company or advance money on its behalf, the amount of any such loan or advance shall not be treated as a contribution to the capital of the Company but shall be a debt due from the Company. The amount of any such loan or advance by a lending Member or Affiliate thereof shall be repayable out of the Company's cash and shall have priority over any distributions made pursuant to Section 5 hereof. All such loans or advances shall bear interest at the Prime Rate plus two (2) percentage points, or under terms and conditions so approved by the Members. Except as otherwise set forth in this Agreement none of the Members shall be obligated to make any loan or advance to the Company.

SECTION 4

ALLOCATIONS

Tax Allocations . The Managers, with the advice of the Company's Accountants, shall make all necessary and appropriate Tax Allocations.

Profits . After giving effect to the Tax Allocations, Profits for any fiscal year shall be allocated to the Members in proportion to their Membership Percentages.

Losses . After giving effect to the Tax Allocations, Losses for any fiscal year shall be allocated to the Members in proportion to their Membership Percentages.

No Priority . No Member shall have priority over any other Member, either as to the return of a Capital Contribution, as to Profits or Losses, or distributions; provided however, this Section 4.4 shall not apply to loans (as distinguished from a Capital Contribution or a guaranteed payment) which a Member has made to the Company.

SECTION 5

DISTRIBUTIONS

Net Available Cash . Subject to applicable provisions of the Code and Regulations, Net Available Cash shall be distributed to the Members in proportion to their Membership Percentages at such times and in such amounts as the Managers shall determine.

Amounts Withheld . All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment or distribution by the Company to the Members shall be treated as amounts distributed to the Members pursuant to this Section 5 for all purposes under this Agreement. The Managers may allocate any such amounts among the Members in any manner that is in accordance with applicable law.

Limitations on Distributions . No distribution shall be declared or made by the Managers if payment of such distribution would cause the Company to violate any limitation on distributions provided in the Act, the Code, and the Regulations or in any agreement to which the Company is a party.

SECTION 6

MANAGEMENT; INDEMNIFICATION

6.1 Appointment of Managers . The management of the Company shall be vested in two (2The initial Managers are as follows:

Appointed by MRI (the " MRI Managers "): Joseph P. Mirabito

Appointed by CNG (the " CNG Managers "): Michael I. German

6.2 Authority of the Chief Executive Office (CEO) Except to the extent otherwise provided herein, the CEO shall have the sole and exclusive right to manage the day to day business of the Company, to make all decisions regarding those matters and to perform all other acts and activities customary to or incidental to the management of the business of the Company, except only those acts and things as to which approval by the managers or Members is expressly required by this Agreement or the Act.

(a) acquire by purchase, lease or otherwise any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purposes of the Company;

(b) operate, maintain, improve, construct, own, mortgage, lease and sell any real estate and any personal property necessary (including the Property), convenient or incidental to the accomplishment of the purposes of the Company;

(c) execute any and all agreements, contracts, documents, certifications and instruments necessary or convenient in connection with the management, maintenance and operation of the Property;

(d) execute, in furtherance of any or all of the purposes of the Company, any deed, lease, mortgage, deed of trust, mortgage note, promissory note, bill of sale, contract or other instrument purporting to convey or encumber any or all of the Property;

(e) prepay in whole or in part, refinance, recast, modify or extend any liabilities affecting the Property and, in connection therewith, execute any extensions or renewals of encumbrances on any or all of the Property;

(g) contract on behalf of the Company for the employment and services of employees and/or independent contractors and delegate to such Persons the duty to manage or supervise any of the assets or operations of the Company;

(h) expend the capital and income of the Company to the extent permitted by this Agreement;

(i) ask for, collect and receive any rents, issues and profits or income from the Property or any part or parts thereof and to disburse Company funds for Company purposes to those Persons entitled to receive the same;

(j) purchase from or through others, contracts of liability, casualty or other insurance for the protection of the Property or affairs of the Company or the Members or for any purpose convenient or beneficial to the Company;

(k) institute, prosecute, defend, settle, compromise and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against the Company or the Members or the Managers in connection with activities arising out of, connected with or incidental to this Agreement and to engage counsel or others in connection therewith;

(l) engage in any kind of activity and perform and carry out contracts of any kind (including contracts of insurance covering risks to the Property and Manager liability) necessary or incidental to, or in connection with, the accomplishment of the purposes of the Company, as may be lawfully carried on or performed by a limited liability company under the laws of each state in which the Company is then formed or qualified;

6.3 Right to Rely on Manager . Any Person dealing with the Company may rely upon a certificate signed by a Manager as to: (i) the identity of any Manager or Member; (ii) the existence or nonexistence of any fact or facts which constitute a condition precedent to acts by the Managers or which are in any other manner germane to the affairs of the Company; (iii) the Persons who are authorized to execute and deliver any instrument or document on behalf of the Company; or (iv) any act or failure to act by the Company or any other matter whatsoever involving the Company or any Member.

6.4 Transactions Requiring Approval . Notwithstanding any other provision of this Agreement, the Managers shall not, without the consent of all Members holding eighty percent (80%) of the Membership Percentages of the Company:

Admit any additional Members other than pursuant to Section 10 hereof;
Elect to dissolve the Company;
Approve the sale or other disposition of all or substantially all of the assets of the Company;
Approve the merger or consolidation of the Company with or into another entity; or
Amend this Agreement.

6.5 Authority, Duties and Obligations of Manager .

Without limiting the generality of the foregoing, the Managers shall have all of the rights and powers which may be possessed by Managers under the Act, including, without limitation, the rights and powers set forth in this Section 6.5. Decisions of the Managers shall be made bythe CEO and other officers of the company. In no way limiting the foregoing, the Managers shall have the following rights and powers:

(b) The Managers shall cause the Company to conduct its business and operations separate and apart from that of any Member or Manager or any of its Affiliates, including, without limitation, (i) segregating Company assets and not allowing funds or other assets of the Company to be commingled with the funds or other assets of, held by, or registered in the name of, any Member or Manager or any of its Affiliates; (ii) maintain books and financial records of the Company separate from the books and financial records of any Member or Manager or any of its or their Affiliates, in observing all Company procedures and formalities, including, without limitation, maintaining minutes of Company meetings and acting on behalf of the Company only pursuant to due authorization by the Members; (iii) causing the Company to pay its liabilities from assets of the Company; and (iv) causing the Company to conduct its dealings with third parties in its own name and as a separate and independent entity.

(c) The Managers shall take all actions which may be necessary or appropriate (i) for the continuation of the Company's valid existence as a limited liability company under the laws of the State of New York and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Members or to enable the Company to conduct the business of the Company; and (ii) for the accomplishment of the Company's purposes, including the business of the Company, in accordance with the provisions of this Agreement and applicable laws and regulations.

(d)The Managers shall be under a fiduciary duty to conduct the affairs of the Company in the best interests of the Company and of the Members, including the safekeeping and use of all Company assets for the exclusive benefit of the Company.

(e) care for and distribute funds to the Members by way of cash, income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Company or this Agreement;

(f) borrow additional funds and incur additional indebtedness on behalf of the Company and secure the same with liens and encumbrances on the real and personal property of the Company;

(g) to make any and all elections for federal, state and local tax purposes including, without limitation, any election, if permitted by applicable law: (i) to adjust the basis of the assets of the Company pursuant to the Code or the comparable provisions of state or local law, in connection with transfers of interests in the Company and Company distributions; (ii) to extend the statute of limitations for assessment of tax deficiencies against Members with respect to adjustments to the Company's federal, state or local tax returns; and (iii) to represent the Company and the Members before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company and the Members in their capacity as Members and to execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Company or the Members. The Managers are specifically authorized to act as the "Tax Matters Partner" under the Code and in any similar capacity under state or local law until such time, if ever, that the Members designate in writing a different individual to serve as the Tax Matters Partner.

(h) Consistent with section 6.12 support the officers of the company

6.6 Indemnification .

(a) No Manager or Member of the Company shall be liable to the Company or its Members for monetary damages for an act or omission in such person's capacity as a Manager or a Member, except for (i) acts or omissions which the Manager knew at the time of the acts or omissions were clearly in conflict with the interests of the Company; (ii) any transaction from which the Manager derived an improper personal benefit; or (iii) acts or omissions occurring prior to the date this provision becomes effective. If the Act is amended to authorize action further eliminating or limiting the liability the Manager and Members, then the liability of the Managers and Members of the Company shall be eliminated or limited to the fullest extent permitted by the Act as so amended. Any repeal or modification of the governing sections of the Act shall not adversely affect the right or protection of the Managers and Members existing immediately before such repeal or modification.

(b) The Company shall indemnify the Managers and Members to the fullest extent permitted or required by the Act, as amended from time to time, and the Company may advance expenses incurred by the Manager or a Member upon the approval of the Manager and the receipt by the Company of an undertaking whereby such Manager or Member agrees to reimburse the Company if in the event it shall ultimately be determined that such Manager or Member is not entitled to be indemnified by the Company against such expenses. The Company may also indemnify its employees and other representatives or agents up to the fullest extent permitted under the Act or other applicable law, provided that the indemnification in each such situation is first approved by the Manager.

(c) The indemnification provided by this Agreement shall: (i) be deemed exclusive of any other rights to which a person seeking indemnification may be entitled under any statute, agreement, vote of Members or disinterested Managers, or otherwise, both as to action in official capacities and as to action in another capacity while holding such office; (ii) continue as to a Person who ceases to be a Manager or a Member; (iii) inure to the benefit of the estate, heirs, executors, administrators or other successors of an indemnitee; and (iv) not be deemed to create any rights for the benefit of any other person or entity.

(d) The details concerning any action to limit the liability, indemnify or advance expenses to a Manager, a Member or other person, taken by the Company shall be reported in writing to the Members with or before the notice or waiver of notice of the next Members' meeting or with or before the next submission to Members of a consent to action without a meeting or, if sooner, separately within ninety (90) days immediately following the date of the action.

6.7 Compensation and Expenses of the Managers . The Managers may charge the Company for any reasonable expenses incurred in connection with the Business. Except as otherwise set forth in this Agreement, the Managers shall not receive any fees or other compensation for serving as the Managers, unless such fees or other compensation are approved by a majority of Membership Percentages of the Members. The neutral manager shall receive a fee for his/her service the amount to be determined by a management vote of the six other managers.However, a Manager (if the Manager is also a Member) shall be entitled to the distributions and allocations provided for elsewhere in this Agreement.

6.8 Operating Restrictions .

(a) No loans or guarantees of loans shall be made by the Company to any Member or any Affiliate of a Member.

(b) No rebates, kickbacks, or reciprocal arrangements may be received or entered into by the Managers, nor may the Managers participate in any business arrangement which would circumvent this Agreement.

(d) Unless otherwise approved by the Managers or Members, the signature of one (1) MRI Manager and one (1) CNG Manager shall be necessary to convey title to any real property owned by the Company or to execute any promissory notes, trust deeds, mortgages or other instruments of hypothecation, and all of the Members agree that a copy of this Agreement may be shown to the appropriate parties in order to confirm the same, and further agree that the signature of one (1) MRIMRI Manager and one (1) CNG Manager shall be sufficient to execute any documents necessary to effectuate this or any other provision of this Agreement.

6.9 Removal of the Managers . The MRI Manager shall serve at the pleasure of MRIMRI and may be removed by MRIMRI at any time. The CNG Manager shall serve at the pleasure of CNG and may be removed by CNG at any time.

6.10 Vacancies . In the event of a vacancy due to the death, resignation or any other cause (including, but not limited to, removal pursuant to Section 6.9) of a Manager, such vacancy shall be filled as follows:

(a) With respect to a MRI Manager, by appointment by MRI.

(b) With respect to a CNG Manager, by appointed by CNG.

6.11 Limitation on Liability of the Managers . No Manager or his employees or agents shall be liable, responsible or accountable in damages or otherwise to the Company or any Member for any loss to the Company or any Member resulting from the operation of the business of the Company or any action taken or not taken by the Manager; provided, however, nothing in this Section shall be deemed to relieve the Managers of any liability resulting from their bad faith, intentional misconduct, knowing violation of the law or breach of any fiduciary duty.

6.12 Officers . The Managers may designate one or more individuals as officers of the Company, who shall have such title(s) and shall exercise and perform such powers and duties as the Manager may from time to time assign. Any officer may be removed by the Managers at any time and for any or no reason whatsoever. Initially the officers shall be assigned more duties outlined in section 6.2 The salary and other compensation, if any, of the officers shall be fixed by the Managers. The CNGC president shall be the CEO of the Company at the time of incorporation. The CEO shall operate the Company on a day to day basis and will have the authority to make financial and operational decisions. The CEO may be removed and a new CEO named by a vote of eighty percent (80%) of the Members.

SECTION 7

BOOKS AND RECORDS

Books and Records . The Company shall keep adequate books and records at its place of business, setting forth a true and accurate account of all business transactions arising out of and in connection with the conduct of the Company. Any Member or his designated representative shall have the right, at any reasonable time and at his own expense to have access to and inspect and copy the contents of such books or records. Within a reasonable period after the end of each Company fiscal year, each Member shall be furnished with an annual report containing a balance sheet as of the end of such fiscal year, statements of income, Members' equity, changes in financial position and cash flow and any necessary tax information for the year then ended. Necessary tax information shall be delivered to each Member as soon as practicable after the end of each Company fiscal year.

SECTION 8

MEETINGS AND MEANS OF VOTING

8.1 Meetings and Means of Voting . The Company shall be required to hold an annual meeting of the Members on the second Tuesday in June of each year. Special meetings of the Members may be called upon the written request of any Member. The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Members not less than three (3) days or more than thirty (30) days prior to the date of such meeting. Members may vote in person or by proxy at such meeting. Whenever the vote or consent of Members is permitted or required under the Agreement, such vote or consent may be taken without a meeting on written consent, setting forth the action so taken, signed by the Members holding eighty percent (80%) of the Membership Percentages entitled to vote. All votes or consents shall be in accordance with Membership Percentages with each Member being entitled to cast one vote (or a fraction of a vote) for each full percentage (or fraction of a percentage) in such Member's Membership Percentage. Except as otherwise expressly provided in this Agreement, the vote of eighty percent (80%) of the Membership Percentages entitled to vote, shall control.

SECTION 9

TRANSFERS OF INTERESTS

Restriction on Transfers . Except as otherwise permitted by this Agreement, no Member shall Transfer all or any portion of his interest in the Company (the " Interest ") without the consent of the Members holding eighty percent (80%) of the Membership Percentages entitled to vote. Any Transfer or attempted Transfer by a Member in violation of the preceding sentence shall be null and void and of no effect whatsoever.

Permitted Transfers . Subject to the conditions and restrictions set forth in Section 9.4 hereof, a Member may at any time Transfer all or any portion of his Interest to any one or more of the following (a " Permitted Transferee "): (i) any other Member; (ii) any Affiliate of a Member; (iii) any Person approved by the Members as a Permitted Transferee; or (iv) any Purchaser in accordance with Section 9.3 hereof (any such Transfer being referred to in this Agreement as a " Permitted Transfer ").

Right of First Refusal . In addition to the other limitations and restrictions set forth in this Section 9, except as permitted by Section 9.2 hereof, no Member shall Transfer all or any portion of his Interest (the " Offered Interest ") unless such Member (the " Seller ") first offers to sell the Offered Interest pursuant to the terms of this Section 9.3.

(a) No Transfer may be made under this Section 9.3 unless the Seller has received a bona fide written offer (the " Purchase Offer ") from a Person (the " Purchaser ") to purchase the Offered Interest for a purchase price denominated and payable in United States dollars at closing or according to specified terms, with or without interest. The Purchase Offer shall be in writing and signed by the Purchaser.

(b) The Seller shall give the Company and the remaining Members (the " Remaining Members ") written notice of his intent to Transfer the Offered Interest (the " Offer Notice "), together with a copy of the Purchase Offer.

(c) The Remaining Members shall have the right to purchase all, but not less than all, of the Offered Interest at the price set forth in the Purchase Offer or the purchase price as determined pursuant to Section 9.7 hereof, whichever is lower. The Remaining Members shall give the Seller notice of their intent to exercise their rights of first refusal under this Section 9.3 within thirty (30) days from the date of the Purchase Offer.

(d) In the event the Remaining Members exercise their rights of first refusal pursuant to this Section 9.3, the closing of the sale of the Offered Interest shall take place within thirty (30) days after notice to the Seller of the Remaining Members' intent to purchase the Offered Interest upon the terms set forth in Section 9.8 hereof. The Seller and the Remaining Members shall execute such documents and instruments as may be necessary or appropriate to effect the sale of the Offered Interest pursuant to the terms of this Section9.

Conditions to Transfer . A Transfer shall not be treated as a Permitted Transfer under Section 9.2 hereof unless and until the following conditions are satisfied:

(a) The transferor (or his personal representative, as the case may be) and the transferee shall execute and deliver to the Company such documents and instruments of conveyance as may be necessary or appropriate to effect such Transfer and to confirm the agreement of the transferee to be bound by the provisions of this Agreement.

(b) The transferor (or his personal representative, as the case may be) and the transferee shall furnish the Company with the transferee's taxpayer identification number, sufficient information to determine the transferee's initial tax basis in the Interest Transferred, and any other information reasonably necessary to permit the Company to file all required federal and state tax returns and other legally required information statements or returns.

(c) The transferor and the transferee shall have complied with all applicable laws, rules and regulations, including all applicable securities laws and regulations.

(d) The Company shall be reimbursed by the transferor for all reasonable costs and expenses incurred by the Company in connection with the Transfer.

Purchase upon Change in Control . Each Member agrees that upon a Change of Control with respect to a Member, the Company shall have the option to purchase the entire Interest then owned by such Member in accordance with Sections 9.7 and 9.8. The option may be exercised by giving notice to the Member whose interest is to be purchased within ninety (90) days after the Change in Control has occurred. The closing of the purchase and sale shall take place within sixty (60) days of the date the option is exercised.

Adverse Act Purchase .

(a) Upon the occurrence of an Adverse Act with respect to a Member, such Member shall automatically be deemed to have offered to sell his entire Interest to the Company on the terms and conditions contained in this Section 9.6 and Sections 9.7 and 9.8 hereof. The Company shall have ninety (90) days from the date of the determination of the purchase price in accordance with Section 9.7 hereof during which to accept or reject the deemed offer to sell. In the event the Company fails to accept within such ninety (90) day period, the offer shall automatically be deemed rejected.

(b) The closing of the purchase and sale of the selling Member's Interest shall occur within ninety (90) days of the date the deemed offer to sell is accepted.

Purchase Price . For purposes of this Section 9, the purchase price shall be the amount determined by multiplying the selling Member's Membership Percentage by the Fair Market Value of the Company as of the last day of the month immediately preceding (i) the date of the Offer Notice in the case of a purchase pursuant to Section 9.3 hereof; (ii) the date of the change of control in the case of a purchase pursuant to Section 9.5 hereof; or (iii) the date of the occurrence of the Adverse Act in the case of a purchase pursuant to Section 9.6 hereof (the " Valuation Date ").

Payment of Purchase Price . In the event of the purchase of a Member's Interest pursuant to Sections 9.3, 9.5 or 9.6, the purchase price shall be paid as follows:

(a) There shall be paid in cash upon closing an amount equal to ten percent (10%) of the total purchase price.

(b) The balance of the purchase price shall be evidenced by a promissory note from the Company (the " Purchase Note "). The Purchase Note shall bear interest at the Prime Rate in effect on the closing date plus two (2) percentage points and shall be paid in sixty (60) equal monthly installments of principal and interest on an amortized basis. The first installment on the Purchase Note shall be due and payable on the first day of the second month following the month during which the closing occurs (together with interest from the date of the closing to the first day of the month following the month during which the closing occurs). The Purchase Note shall permit the prepayment thereof, either in whole or in part, at any time or from time to time, without penalty. The Purchase Note shall also contain a provision requiring the mandatory prepayment of the entire amount due thereunder upon the sale by the Company of all or substantially all of its assets. If required by any third party lending institution with which the Company does business on the date of the closing, the Purchase Note shall be subordinate to any existing indebtedness due and owing to such third party lending institution and the Member's personal representative shall execute any documentation reasonably requested to evidence such subordination including, without limitation, an inter-creditor agreement. Payment of the Purchase Note shall be solely the responsibility of the Company. The selling Member's personal representative shall have no recourse with respect to the Purchase Note against any of the remaining Members. Neither the Company nor any of the remaining Members shall be required to give any security for the payment of the Purchase Note.

Rights of Unadmitted Assignees .

(a) A Person who acquires one or more Interests but who is not admitted as a Substituted Member in accordance with this Agreement shall be entitled only to allocations and distributions with respect to such Interest in accordance with this Agreement, shall have no right to any information or accounting of the affairs of the Company, shall not be entitled to participate in the management of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement (collectively, the " Non-Economic Rights ").

(b) In the event of a Transfer of an Interest to a Person who is not admitted as a Substituted Member, the Transferring Member shall automatically be deemed to have sold, assigned and conveyed to the Company all of the Non-Economic Rights associated with the Transferred Interest.

Admission of Assignees as Members . Subject to the other provisions of this Section 9, a transferee of an Interest may be admitted to the Company as a Substituted Member only upon satisfaction of the conditions set forth below:

(a) All of the non-transferring Members consent to such admission, which consent may be given or withheld in the sole and absolute discretion of the Members.

(b) The Interest with respect to which the transferee is being admitted was acquired by means of a Permitted Transfer.

Legend . Each Member hereby agrees that the following legend may be placed upon any counterpart of this Agreement, the Certificate, or any other document or instrument evidencing ownership of Interests:

The Interests represented by this document have not been registered under any securities laws and the transferability of such Interests is restricted. Such Interests may not be sold, assigned or transferred, nor will any assignee, vendee, transferee or endorsee thereof be recognized by the issuer as having acquired any such Interests for any purposes, unless (1) a registration statement under the Securities Act of 1933, as amended, with respect to such Interests shall then be in effect and such transfer has been qualified under all applicable state securities laws, or (2) the availability of an exemption from such registration and qualification shall be established to the satisfaction of counsel to the Company.
The Interests represented by this document are subject to further restriction as to their sale, transfer, hypothecation, or assignment as set forth in the Operating Agreement and agreed to by each Member. Said restriction provides, among other things, that no Interest may be transferred without first offering such Interest to the other Members, and that no vendee, transferee, assignee, or endorsee of a Member shall have the right to become a substituted Member without the consent of all of the Members which consent may be given or withheld in the sole and absolute discretion of the Members.

Distributions and Applications in Respect to Transferred Interests . If any Interest is sold, assigned, or Transferred during any fiscal year in compliance with the provisions of this Section 9, Profits, Losses, each item thereof, and all other items attributable to the Transferred Interest for such fiscal year shall be divided and allocated between the transferor and the transferee by taking into account their varying interests during such fiscal year in accordance with Code using any conventions permitted by law and selected by the Manager. Neither the Company nor any Member shall incur any liability for making allocations and distributions in accordance with the provisions of this Section 9, whether or not any Member or the Company has knowledge of any Transfer of ownership of any Interest.

SECTION 10

WITHDRAWAL; NON-COMPETITION; DEADLOCK

Covenant not to Withdraw or Dissolve . Except as otherwise permitted by this Agreement, each Member hereby covenants and agrees not to (i) withdraw or attempt to withdraw from the Company; or (ii) exercise any power under the Act to dissolve the Company.

Future Business ventures by CNG In the event that CNG shall wish to develop a new franchise for the local distribution of natural gas it shall first offer that opportunity to the Company if (a) that franchise area will lie in an area easterly of a line drawn between city hall of Corning, New York and City Hall of Rochester, New York in the State of New York, (b) the franchise will lie within a geographioc area where MRI regularly and substantially provides heating services and supplies (e.g. propane or heating oil sales and services), or (c) MRI has been the primary procuring caus of developing that business opportunity. The above terms of this paragraph 10.2 notwithstanding:

(a) CNG may develop any business opportunity where any portion of that franchise will lie within 50 miles of any CNG operation, including its pipelines, existing as of the date of this agreement.

(b) CNG may develop any business opportunity where the primary source of natural gas supply is not local production.

Except as provided in (a) or (b) above, CNG agrees not to enter into any natural gas distribution venture with an entity involved in substantially the same business as MRI, without first offering to undertake the venture through the Company or with MRI on substantially the same terms offered to the other proposed joint venture. In that case, the natural gas distribution venture will be first offered to the Company for approval or rejection by its managers. If the opportunity is not accepted by the Company's managers within thirty (30) days, it will be deemed rejected and then will be offered to MRI. In that instance, MRI must accept the proposal within fifteen (15) days or it will be deemed to have rejected the offer and CNG will be permitted to proceed without the Company or MRI.

Deadlock .

(a) In the event the Members or Managers, as the case may be, shall be unable in good faith to resolve a dispute between them or arrive at a decision required to be made under this Agreement within the time period provided for, the provisions of this Section 10.3 shall apply.

(b) Either Member may declare a deadlock by the giving of an " Election Notice " to the other Member. The Election Notice shall state (i) an amount (the " Stated Value ") as the proposed Fair Market Value of the Property; and (ii) shall specify the proposed payment terms (the " Payment Terms ") of the Deemed Purchase Price (as defined below).

(c) The Member giving the Election Notice is referred to as the " Electing Member " and the Member receiving the Election Notice is referred to as the " Notice Member ".

(d) An Election Notice shall constitute an irrevocable offer by the Electing Member to either (i) purchase all, but not less than all, of the Membership Percentages owned by the Notice Member for the purchase price determined in accordance with Section 9.7 hereof but using the Stated Value as the Fair Market Value of the Property (the " Deemed Purchase Price ") and on the Payment Terms; or (ii) sell all, but not less than all, of the Membership Percentages owned by the Electing Member to the Notice Member for the Deemed Purchase Price and on the Payment Terms.

(e) For a period of sixty (60) days following receipt of the Election Notice (the " Election Period "), the Notice Member shall have the option to elect either to (i) purchase all, but not less than all, of the Membership Percentages owned by the Electing Member for the Deemed Purchase Price and on the Payment Terms; or (ii) sell all, but not less than all, of the Membership Percentages owned by the Notice Member to the Electing Member for the Deemed Purchase Price and on the Payment Terms. The Notice Member may exercise the option by serving a notice (the " Exercise Notice ") on the Electing Member stating its choice to buy or sell prior to the end of the Election Period. If the Notice Member does not give an Exercise Notice on or before the end of the Election Period, the Electing Member shall have the choice to either buy or sell at the price and on the terms set forth on the Election Notice.

(f) The closing of the purchase and sale of the Membership Percentages shall occur on a date and time mutually agreeable to the Electing Member and the Notice Member which in all events, must occur within thirty (30) days after NYSPSC approval is granted for transfer of interest (if necessary).. The closing shall take place at such place as the Electing Member and the Notice Member shall mutually agree or, failing such agreement, at the offices of the Company. At the closing, the parties shall execute and deliver such documents and instruments of conveyance as may be necessary or appropriate to effectuate the closing of the sale of the Membership Percentages.

(g) Once given, an Election Notice and/or Exercise Notice shall be irrevocable. In the event more than one Election Notice is given, the later dated notice shall be of no force or effect.

SECTION 11

DISSOLUTION AND WINDING UP

Dissolution . The Company shall dissolve upon the first to occur of any of the following events (the " Liquidating Events "):

(a) The sale by the Company of all or substantially all its assets and properties;

(b) The election of the Members to dissolve the Company;

(c) The happening of any other event that makes it unlawful, impossible or impractical to carry on the business of the Company; or

(d) A complete cessation of the Business.

The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not dissolve prior to the occurrence of a Liquidating Event. Furthermore, the Members agree that the Company shall not dissolve on the bankruptcy, death, expulsion, incapacity or withdrawal of a Member (a " Statutory Dissolution Event ") and that on the happening of a Statutory Dissolution Event, the Company shall automatically be deemed to continue in existence. If it is determined by a court of competent jurisdiction that the Company has dissolved prior to the occurrence of a Liquidating Event then the Members hereby agree to continue the business of the Company without a winding up or liquidation.

Winding Up . Upon dissolution of the Company, the Managers or court-appointed trustee if there be no Managers shall take full account of the Company's liabilities and assets. The assets and properties of the Company shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order:

(a) To the payment and discharge of all of the Company's debts and liabilities (other than those to Members), including the establishment of any necessary reserves;

(b) Second, to the payment and discharge of all of the Company's debts and liabilities to Members; and

(c) The balance, to the Members and Assignees in accordance with their Capital Accounts after giving effect to all contributions, distributions and allocations for all periods.

Establishment of Trust . In the discretion of the Managers, a pro rata portion of the distributions that would otherwise be made to the Members and Assignees pursuant to Section 11.2 hereof may be distributed to a trust established for the benefit of the Members and Assignees for the purposes of liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or unforeseen liabilities or obligations of the Company or of the Members arising out of or in connection with the Company. The assets of any such trust shall be: (i) distributed to the Members and Assignees from time to time, in the reasonable discretion of the Managers, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Members and Assignees pursuant to this Agreement; or (ii) withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Company provided that such withheld amounts shall be distributed to the Members and Assignees as soon as practicable.

Rights of Members and Assignees . Except as otherwise provided in this Agreement, each Member or Assignee shall look solely to the assets of the Company for the return of his Capital Contribution and shall have no right or power to demand or receive property other than cash from the Company.

SECTION 12

MISCELLANEOUS

Notices . Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be delivered personally to the Person or to an officer of the Person to whom the same is directed, or sent by regular, registered, or certified mail, addressed as follows: (i) if to the Company, to the Company at the address set forth in Section 2.4 hereof, or to such other address as the Company may from time to time specify by notice to the Members; or (ii) if to a Member, to such Member at the address set forth in the first paragraph hereof hereto or to such other address as such Member may from time to time specify by notice to the Company. Any such notice shall be deemed to be delivered, given and received for all purposes as of the date so delivered, if delivered personally or if sent by regular mail, or as of the date on which the same was deposited in a regularly maintained receptacle for the deposit of United States mail, if sent by registered or certified mail, postage and charges prepaid.

Binding Effect . Except as otherwise provided in this Agreement, every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective heirs, legatees, legal representatives, successors, transferees and assigns.

Construction . Every covenant, term and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any Member.

Headings . Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

Severability . Every provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.

Incorporation by Reference . Every exhibit, schedule and other appendix attached to this Agreement and referred to herein is hereby incorporated in this Agreement by reference.

Additional Documents . Each Member, upon the request of the Managers, agrees to perform all further acts and execute, acknowledge and deliver any documents that may be reasonably necessary, appropriate or desirable to carry out the provisions of this Agreement.

Variation of Pronouns . All pronouns and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.

New York Law . The laws of the State of New York shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties of the Members.

Waiver of Action for Partition . Each of the Members irrevocably waives any right that he may have to maintain any action for partition with respect to any of the Property.

Counterpart Execution . This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement.

Specific Performance . The parties acknowledge that they will be irreparably harmed in the event any of the provisions of this Agreement are violated and that the damages that may result therefrom will be difficult, if not impossible, to calculate. Should any dispute arise concerning any matter provided for in this Agreement, the parties agree that an injunction may be issued restraining any of the foregoing events pending the resolution of the controversy. In the event of any controversy concerning any right or obligation of a party, such right or obligation shall be enforceable in a court of equity by a decree of specific performance. Any such remedy, however, shall be cumulative and not exclusive, and shall be in addition to any other remedies which the parties hereto may have.

Entire Agreement . This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof and supersedes any previous understanding whether oral or written.

[ Signature Page Follows ]

IN WITNESS WHEREOF , the parties have entered into this Operating Agreement as of the day first above set forth.

	LEATHERSTOCKING PIPELINE COMPANY, LLC

	By:	_____________________________________
		Michael I. German Manager

	MIRABITO REGULATED INDUSTRIES, LLC
	By:	_____________________________________
		Joseph P. Mirabito Manager

	CORNING NATURAL GAS CORPORATION,
	Member

	By:	_____________________________________
		Michael I German CEO

OPERATING AGREEMENT

of

LEATHERSTOCKING GAS COMPANY, LLC

THIS OPERATING AGREEMENT is entered into and shall be effective as of November 1, 2010 by and among Leatherstocking Gas Company, LLC , a New York limited liability company with an address of 330 West Williams Street, P.O. Box 58, Corning, New York 14830 (the " Company ") and Mirabito Holdings, Inc. a New York corporation with an address of The Metrocenter, 49 Court Street, P.O. Box 5306, Binghamton, New York 13902 (" MHI ") and Corning Natural Gas Corporation , a New York corporation with an address of 330 West Williams Street, P.O. Box 58, Corning, New York 14830 (" CNG ") (each a " Member " and collectively, the " Members ").