0001493152-23-021705.txt : 20230616 0001493152-23-021705.hdr.sgml : 20230616 20230616170214 ACCESSION NUMBER: 0001493152-23-021705 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 29 CONFORMED PERIOD OF REPORT: 20230331 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20230616 DATE AS OF CHANGE: 20230616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Prairie Operating Co. CENTRAL INDEX KEY: 0001162896 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 980357690 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-33383 FILM NUMBER: 231022115 BUSINESS ADDRESS: STREET 1: 8636 N. CLASSEN BOULEVARD CITY: OKLAHOMA CITY STATE: OK ZIP: 73114 BUSINESS PHONE: (713) 424-4247 MAIL ADDRESS: STREET 1: 8636 N. CLASSEN BOULEVARD CITY: OKLAHOMA CITY STATE: OK ZIP: 73114 FORMER COMPANY: FORMER CONFORMED NAME: Creek Road Miners, Inc. DATE OF NAME CHANGE: 20210715 FORMER COMPANY: FORMER CONFORMED NAME: WIZARD BRANDS, INC. DATE OF NAME CHANGE: 20200814 FORMER COMPANY: FORMER CONFORMED NAME: WIZARD ENTERTAINMENT, INC. DATE OF NAME CHANGE: 20181009 8-K/A 1 form8-ka.htm

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K/A

Amendment No. 2

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 3, 2023

 

 

 

Prairie Operating Co.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   000-33383   98-0357690
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)
         

8636 N. Classen Boulevard

Oklahoma City, OK

  73114
(Address of principal executive offices)   (Zip Code)
         
Registrant’s telephone number, including area code: (435) 900-1949
         
N/A
(Former Name or Former Address, If Changed Since Last Report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

None   N/A   N/A

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).

 

Emerging Growth Company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

EXPLANATORY NOTE

 

The sole purpose of this Amendment No. 2 is to incorporate iXBRL tagging performed against Exhibit 99.2 filed herewith. No other changes have been made, and it does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosures previously made.

 

Introductory Note

 

As reported in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission by Prairie Operating Co. (the “Company”) on May 9, 2023 (the “Original Form 8-K”), on May 3, 2023, the Company completed its previously announced merger with Prairie Operating Co., LLC, a Delaware corporation (“Prairie LLC”), pursuant to the terms of that certain Amended and Restated Agreement and Plan of Merger, dated May 3, 2023 (the “Merger Agreement”), by and among the Company, Creek Road Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Merger Sub”), and Prairie LLC, pursuant to which, among other things, Merger Sub merged with and into Prairie LLC, with Prairie LLC surviving and continuing to exist as a Delaware limited liability company and a wholly-owned subsidiary of the Company (the “Merger”). 

 

This Current Report on Form 8-K/A (this “Amendment”) amends and supplements the Original Form 8-K to provide the historical and pro forma financial statements described in Item 9.01 below. No other modifications to the Original Form 8-K are being made by this Amendment. This Amendment should be read in connection with the Original Form 8-K, which provides a more complete description of the Merger.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Businesses Acquired

 

The audited balance sheet of Prairie LLC as of December 31, 2022, and the related statement of operations, statement of members’ deficit and statement of cash flows for the period from June 7, 2022 (date of inception) through December 31, 2022, and the related notes thereto, are filed as Exhibit 99.1 hereto and incorporated herein by reference.

 

The unaudited balance sheet of Prairie LLC as of March 31, 2023, and the related statement of operations, statement of members’ deficit and statement of cash flows for the three months ended March 31, 2023, and the related notes thereto, are filed as Exhibit 99.2 hereto and incorporated herein by reference.

 

(b) Pro Forma Financial Information

 

The unaudited pro forma condensed combined balance sheet of the Company as of March 31, 2023, the unaudited pro forma condensed combined statement of operations of the Company for the three months ended March 31, 2023 and the year ended December 31, 2022, and the notes related thereto are filed as Exhibit 99.3 hereto and incorporated herein by reference.

 

(d) Exhibits

 

Exhibit No.

 

Description

23.1*   Consent of Ham, Langston & Brezina, L.L.P.
99.1*   Audited financial statements of Prairie Operating Co., LLC, together with the report of Ham, Langston & Brezina, L.L.P., as of December 31, 2022 and for the period from June 7, 2022 (date of inception) through December 31, 2022.
99.2   Unaudited financial statements of Prairie Operating Co., LLC, as of and for the three months ended March 31, 2023.
99.3*   Unaudited Pro Forma Condensed Combined Financial Information as of and for the three months ended March 31, 2023 and for the year ended December 31, 2022.
104   Cover Page Interactive Data File (embedded with the Inline XBRL Document).

 

 * Previously Filed

 

2

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Prairie Operating Co.
   
Date: June 16, 2023  
     
  By: /s/ Edward Kovalik
    Edward Kovalik
    Chief Executive Officer

 

3

EX-99.2 2 ex99-2.htm
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Exhibit 99.2

 

Prairie Operating Co., LLC

Financial Statements

as of and for the three months ended March 31, 2023

 

Table of Contents  
   
Balance Sheet as of March 31, 2023 F-2
   
Statement of Operations for the three months ended March 31, 2023 F-3
   
Statement of Members’ Deficit for the three months ended March 31, 2023 F-4
   
Statement of Cash Flow for the three months ended March 31, 2023 F-5
   
Notes to Financial Statements F-6

 

F-1

 

 

Prairie Operating Co., LLC

Balance Sheet

March 31, 2023

(unaudited)

 

      
ASSETS     
Current Assets     
Cash  $79,762 
Total Current Assets   79,762 
Other Assets     
Deferred transaction costs   1,973,058 
Total Assets  $2,052,820 
      
LIABILITIES AND MEMBERS’ DEFICIT     
Current Liabilities     
Accrued expenses  $2,496,648 
Accrued expenses – related party   2,084 
Total Current Liabilities   2,498,732 
Total Long-Term Liabilities    
Total Liabilities   2,498,732 
Commitments and contingencies (Note 3)   - 
      
Members’ Deficit   (445,912)
Total Members’ Deficit   (445,912)
Total Liabilities and Members’ Deficit  $2,052,820 

 

The accompanying notes are an integral part of these financial statements.

 

F-2

 

 

Prairie Operating Co., LLC

Statement of Operations

for the three months ended March 31, 2023

(unaudited)

 

      
Revenues  $ 
Expenses     
Operating expenses    
General and administrative expenses   64,392 
Total Expenses   64,392 
Net Loss  $(64,392)

 

The accompanying notes are an integral part of these financial statements.

 

F-3

 

 

Prairie Operating Co., LLC

Statement of Members’ Deficit
for the three months ended March 31, 2023

(unaudited)

 

      
   Members’ Deficit 
Balance - December 31, 2022  $(381,520)
Capital contributions    
Net loss   (64,392)
Balance - March 31, 2023  $(445,912)

 

The accompanying notes are an integral part of these financial statements.

 

F-4

 

 

Prairie Operating Co., LLC

Statement of Cash Flows

for the three months ended March 31, 2023

(unaudited)

 

      
Cash Flows from Operating Activities     
Net loss  $(64,392)
Changes in operating assets and liabilities:     
Increase in accounts payable and accrued expenses   64,309 
Cash used in operating activities   (83)
      
Net decrease in cash  $(83)
Cash - beginning of period   79,845 
Cash - end of period  $79,762 
Supplemental disclosure of cash flow information:     
Cash paid for interest  $ 
Cash paid for income taxes  $ 
      
Supplemental disclosure of non-cash activity:     
Accrued deferred transaction costs associated with the Merger and Exok Transaction   

178,893

 
Accrued deferred transaction costs associated with the PIPE Transaction   

33,501

 

 

The accompanying notes are an integral part of these financial statements.

 

F-5

 

 

Prairie Operating Co., LLC

Notes to Financial Statements

 

Note 1 – Organization and Nature of Business

 

Organization and General

 

Prairie Operating Co., LLC (the “Company”) is a limited liability company formed under the laws of the State of Delaware on June 7, 2022. The Company was formed for the purpose of acquiring and operating oil and gas properties in the United States.

 

As of March 31, 2023, the Company had not commenced any operations. All activity for the period from June 7, 2022 (inception) to March 31, 2023, relates to the Company’s formation, the Merger (as defined below) and the Exok Acquisition (see Notes 1 and 5). As of March 31, 2023, the Company did not generate any operating revenues.

 

Merger Agreement

 

On October 24, 2022, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with Prairie Operating Co., a Delaware corporation (“PrairieCo”), and Creek Road Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), pursuant to which Merger Sub merged with and into the Company (the “Merger”), with the Company surviving and continuing to exist as a Delaware limited liability company and a wholly-owned subsidiary of PrairieCo. The Merger closed on May 3, 2023 (the “Closing Date”). See Note 5 for further discussion.

 

Acquisition of Oil and Gas Properties

 

Concurrently with entering into the Merger Agreement, the Company entered into a purchase and sale agreement (the “PSA”) with Exok, Inc. (“Exok”) to acquire certain oil and gas leasehold interests (the “Exok Assets”) covering 23,485 net acres and 37,030 gross acres in Weld County, Colorado in exchange for $28,182,000 payable as (i) $24,000,000 in cash and (ii) $4,182,000 in shares of common stock of PrairieCo (“Common Stock”) and warrants to purchase shares of Common Stock (the “Exok Acquisition”). The Exok Acquisition closed on May 3, 2023. See Note 5 for further discussion.

 

Note 2 – Going Concern

 

Since its inception, the Company has incurred significant losses. The Company had a net loss of $64,392 for the three months ended March 31, 2023. We cannot predict if we will be profitable. We may continue to incur losses for an indeterminate period of time and may be unable to achieve profitability. An extended period of losses and negative cash flow may prevent us from successfully operating and expanding our business. We may be unable to achieve or sustain profitability on an ongoing basis. On March 31, 2023, we had cash of $79,762, a working capital deficit of $2,418,970, and a members’ deficit of $445,912. Upon closing of the Merger and related transactions on May 3, 2023, PrairieCo received proceeds from the issuance of preferred stock of $17.3 million. A majority of these proceeds remain within PrairieCo after the Merger and related transactions for use in its business.

The assessment of the liquidity and going concern requires the Company to make estimates of future activity and judgments about whether the Company can meet its obligations and has adequate liquidity to operate. Significant assumptions used in Company’s forecasted model of liquidity in the next 12 months include PrairieCo’s current cash position, inclusive of the impacts from the Merger and related transactions discussed above, its ability to obtain funding from PrairieCo, and its ability to manage spending. Based on an assessment of these factors, management believes that the Company will have adequate liquidity for its operations for at least the next 12 months.

 

The financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the matters discussed herein.

 

F-6

 

 

Note 3 – Commitments and Contingencies

 

The Company reimbursed members and others for reasonable, documented and customary out-of-pocket expenses incurred in connection with services provided related to the Company’s formation, the Merger and the Exok Acquisition (see Notes 1 and 5) upon closing. As of March 31, 2023, such expenses were approximately $10,000 and were not included in the financial statements.

 

Note 4 – Sale of Options

 

On August 31, 2022, the Company entered into agreements with its members whereby each member was provided non-compensatory options to purchase a 40% membership interest in the Company for $1,000,000. The non-compensatory options were sold for $80,000 in total and expire on August 31, 2027. The restricted options only become exercisable in 25% increments upon the achievement of the following production milestones in barrels of oil equivalent per day (“BOE/D”): 2,500 BOE/D, 5,000 BOE/D, 7,500 BOE/D, and 10,000 BOE/D.

 

Note 5 – Subsequent Events

 

Non-Compensatory Options

 

On May 3, 2023, prior to the closing of the Merger, the Company entered into a non-compensatory option purchase agreement with its members, Bristol Capital LLC (“Bristol”) and a third party investor pursuant to which Bristol and such third party investor purchased non-compensatory options for $24,000 and $8,000, respectively, from the Company’s members. Following such purchase, each member of Prairie owns non-compensatory options to purchase a 30% membership interest in the Company, Bristol owns non-compensatory options to purchase a 30% membership interest in the Company and a third party investors owns non-compensatory options to purchase a 10% membership interest in the Company.

 

Amended and Restated Merger Agreement

 

On May 3, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “AR Merger Agreement”) with PrairieCo and Merger Sub to, among other things:

 

(i) remove the reverse stock split of the shares of Common Stock, at a ratio between 1-23 and 1-30 that was contemplated to occur as part of a series of restructuring transactions prior to the consummation of a contemplated sale of PrairieCo’s securities to certain investors in a private placement (the “PIPE Transaction”);

 

(ii) amend the date by which the AR Merger Agreement may be terminated by either PrairieCo or the Company if the Merger has not been consummated to on or before September 30, 2023;

 

(iii) reflect the terms of the AR PSA (as defined below) and the PIPE Transaction; and

 

(iv) provide for the assumption of the Company’s long-term incentive plan by PrairieCo prior to the effective time of the Merger.

 

Amended Purchase and Sale Agreement

 

On May 3, 2023, the Company entered into an Amended and Restated Purchase and Sale Agreement (the “AR PSA”) with PrairieCo and Exok to, among other things:

 

(i) reflect that the Exok Assets to be purchased by the Company for a total amount of $3,000,000 will consist of approximately 3,157 net mineral acres in, on and under approximately 4,494 gross acres;

 

(ii) amend the effective date of the conveyance of the Exok Assets to be the Closing Date;

 

(iii) remove the issuance of $4,182,000 in total equity consideration to Exok, which consisted of (a) 836,4000 shares of Common Stock and (b) 836,400 warrants to purchase 836,400 shares of Common Stock at an exercise price of $6.00 per share; and

 

(iv) include an option of PrairieCo to purchase, from the Closing Date until the later of (x) the date that is ninety (90) days following the Closing Date and (y) August 15, 2023, approximately 20,327 net mineral acres in, on and under approximately 32,695 additional gross acres from Exok for a purchase price of $22,182,000, payable in (a) $18,000,000 in cash and (b) $4,182,000 in total equity consideration, consisting of (1) a number of shares of Common Stock equal to the quotient of $4,182,000 divided by the volume weighted average price for shares of Common Stock for twenty (20) consecutive trading days ending on the date such option is exercised by the Company and (2) an equal number of warrants to purchase shares of Common Stock.

 

The Merger and Exok Acquisition both closed on May 3, 2023. At the effective time of the Merger, membership interests in the Company were converted into the right to receive each member’s pro rate share of 65,647,676 shares of Common Stock and PrairieCo assumed and converted non-compensatory options to purchase membership interests of the Company into non-compensatory options to acquire 8,000,000 shares of Common Stock for $0.25 per share, which are only exercisable if specific production hurdles are achieved.

 

F-7

 

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Cover
3 Months Ended
Mar. 31, 2023
Cover [Abstract]  
Document Type 8-K/A
Amendment Flag true
Amendment Description The sole purpose of this Amendment No. 2 is to incorporate iXBRL tagging performed against Exhibit 99.2 filed herewith. No other changes have been made, and it does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosures previously made.
Document Period End Date Mar. 31, 2023
Entity File Number 000-33383
Entity Registrant Name Prairie Operating Co.
Entity Central Index Key 0001162896
Entity Tax Identification Number 98-0357690
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 8636 N. Classen Boulevard
Entity Address, City or Town Oklahoma City
Entity Address, State or Province OK
Entity Address, Postal Zip Code 73114
City Area Code 435
Local Phone Number 900-1949
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
XML 9 R2.htm IDEA: XBRL DOCUMENT v3.23.1
Balance Sheet - Prairie Operating Co LLC [Member]
Mar. 31, 2023
USD ($)
Current Assets  
Cash $ 79,762
Total Current Assets 79,762
Other Assets  
Deferred transaction costs 1,973,058
Total Assets 2,052,820
Current Liabilities  
Total Current Liabilities 2,498,732
Total Long-Term Liabilities
Total Liabilities 2,498,732
Commitments and contingencies (Note 3)
Members’ Deficit (445,912)
Total Members’ Deficit (445,912)
Total Liabilities and Members’ Deficit 2,052,820
Nonrelated Party [Member]  
Current Liabilities  
Accrued expenses – related party 2,496,648
Related Party [Member]  
Current Liabilities  
Accrued expenses – related party $ 2,084
XML 10 R3.htm IDEA: XBRL DOCUMENT v3.23.1
Statement of Operations - Prairie Operating Co LLC [Member]
3 Months Ended
Mar. 31, 2023
USD ($)
Revenues
Expenses  
Operating expenses
General and administrative expenses 64,392
Total Expenses 64,392
Net Loss $ (64,392)
XML 11 R4.htm IDEA: XBRL DOCUMENT v3.23.1
Statement of Members' Deficit - Prairie Operating Co LLC [Member]
3 Months Ended
Mar. 31, 2023
USD ($)
Balance - December 31, 2022 $ (381,520)
Capital contributions
Net loss (64,392)
Balance - March 31, 2023 $ (445,912)
XML 12 R5.htm IDEA: XBRL DOCUMENT v3.23.1
Statement of Cash Flows - Prairie Operating Co LLC [Member]
3 Months Ended
Mar. 31, 2023
USD ($)
Cash Flows from Operating Activities  
Net loss $ (64,392)
Changes in operating assets and liabilities:  
Increase in accounts payable and accrued expenses 64,309
Cash used in operating activities (83)
Net decrease in cash (83)
Cash - beginning of period 79,845
Cash - end of period 79,762
Supplemental disclosure of cash flow information:  
Cash paid for interest
Cash paid for income taxes
Supplemental disclosure of non-cash activity:  
Accrued deferred transaction costs associated with the Merger and Exok Transaction 178,893
Accrued deferred transaction costs associated with the PIPE Transaction $ 33,501
XML 13 R6.htm IDEA: XBRL DOCUMENT v3.23.1
Organization and Nature of Business
3 Months Ended
Mar. 31, 2023
Prairie Operating Co LLC [Member]  
Organization and Nature of Business

Note 1 – Organization and Nature of Business

 

Organization and General

 

Prairie Operating Co., LLC (the “Company”) is a limited liability company formed under the laws of the State of Delaware on June 7, 2022. The Company was formed for the purpose of acquiring and operating oil and gas properties in the United States.

 

As of March 31, 2023, the Company had not commenced any operations. All activity for the period from June 7, 2022 (inception) to March 31, 2023, relates to the Company’s formation, the Merger (as defined below) and the Exok Acquisition (see Notes 1 and 5). As of March 31, 2023, the Company did not generate any operating revenues.

 

Merger Agreement

 

On October 24, 2022, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with Prairie Operating Co., a Delaware corporation (“PrairieCo”), and Creek Road Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), pursuant to which Merger Sub merged with and into the Company (the “Merger”), with the Company surviving and continuing to exist as a Delaware limited liability company and a wholly-owned subsidiary of PrairieCo. The Merger closed on May 3, 2023 (the “Closing Date”). See Note 5 for further discussion.

 

Acquisition of Oil and Gas Properties

 

Concurrently with entering into the Merger Agreement, the Company entered into a purchase and sale agreement (the “PSA”) with Exok, Inc. (“Exok”) to acquire certain oil and gas leasehold interests (the “Exok Assets”) covering 23,485 net acres and 37,030 gross acres in Weld County, Colorado in exchange for $28,182,000 payable as (i) $24,000,000 in cash and (ii) $4,182,000 in shares of common stock of PrairieCo (“Common Stock”) and warrants to purchase shares of Common Stock (the “Exok Acquisition”). The Exok Acquisition closed on May 3, 2023. See Note 5 for further discussion.

 

XML 14 R7.htm IDEA: XBRL DOCUMENT v3.23.1
Going Concern
3 Months Ended
Mar. 31, 2023
Prairie Operating Co LLC [Member]  
Going Concern

Note 2 – Going Concern

 

Since its inception, the Company has incurred significant losses. The Company had a net loss of $64,392 for the three months ended March 31, 2023. We cannot predict if we will be profitable. We may continue to incur losses for an indeterminate period of time and may be unable to achieve profitability. An extended period of losses and negative cash flow may prevent us from successfully operating and expanding our business. We may be unable to achieve or sustain profitability on an ongoing basis. On March 31, 2023, we had cash of $79,762, a working capital deficit of $2,418,970, and a members’ deficit of $445,912. Upon closing of the Merger and related transactions on May 3, 2023, PrairieCo received proceeds from the issuance of preferred stock of $17.3 million. A majority of these proceeds remain within PrairieCo after the Merger and related transactions for use in its business.

The assessment of the liquidity and going concern requires the Company to make estimates of future activity and judgments about whether the Company can meet its obligations and has adequate liquidity to operate. Significant assumptions used in Company’s forecasted model of liquidity in the next 12 months include PrairieCo’s current cash position, inclusive of the impacts from the Merger and related transactions discussed above, its ability to obtain funding from PrairieCo, and its ability to manage spending. Based on an assessment of these factors, management believes that the Company will have adequate liquidity for its operations for at least the next 12 months.

 

The financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the matters discussed herein.

 

 

XML 15 R8.htm IDEA: XBRL DOCUMENT v3.23.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2023
Prairie Operating Co LLC [Member]  
Commitments and Contingencies

Note 3 – Commitments and Contingencies

 

The Company reimbursed members and others for reasonable, documented and customary out-of-pocket expenses incurred in connection with services provided related to the Company’s formation, the Merger and the Exok Acquisition (see Notes 1 and 5) upon closing. As of March 31, 2023, such expenses were approximately $10,000 and were not included in the financial statements.

 

XML 16 R9.htm IDEA: XBRL DOCUMENT v3.23.1
Sale of Options
3 Months Ended
Mar. 31, 2023
Prairie Operating Co LLC [Member]  
Sale of Options

Note 4 – Sale of Options

 

On August 31, 2022, the Company entered into agreements with its members whereby each member was provided non-compensatory options to purchase a 40% membership interest in the Company for $1,000,000. The non-compensatory options were sold for $80,000 in total and expire on August 31, 2027. The restricted options only become exercisable in 25% increments upon the achievement of the following production milestones in barrels of oil equivalent per day (“BOE/D”): 2,500 BOE/D, 5,000 BOE/D, 7,500 BOE/D, and 10,000 BOE/D.

 

XML 17 R10.htm IDEA: XBRL DOCUMENT v3.23.1
Subsequent Events
3 Months Ended
Mar. 31, 2023
Prairie Operating Co LLC [Member]  
Subsequent Events

Note 5 – Subsequent Events

 

Non-Compensatory Options

 

On May 3, 2023, prior to the closing of the Merger, the Company entered into a non-compensatory option purchase agreement with its members, Bristol Capital LLC (“Bristol”) and a third party investor pursuant to which Bristol and such third party investor purchased non-compensatory options for $24,000 and $8,000, respectively, from the Company’s members. Following such purchase, each member of Prairie owns non-compensatory options to purchase a 30% membership interest in the Company, Bristol owns non-compensatory options to purchase a 30% membership interest in the Company and a third party investors owns non-compensatory options to purchase a 10% membership interest in the Company.

 

Amended and Restated Merger Agreement

 

On May 3, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “AR Merger Agreement”) with PrairieCo and Merger Sub to, among other things:

 

(i) remove the reverse stock split of the shares of Common Stock, at a ratio between 1-23 and 1-30 that was contemplated to occur as part of a series of restructuring transactions prior to the consummation of a contemplated sale of PrairieCo’s securities to certain investors in a private placement (the “PIPE Transaction”);

 

(ii) amend the date by which the AR Merger Agreement may be terminated by either PrairieCo or the Company if the Merger has not been consummated to on or before September 30, 2023;

 

(iii) reflect the terms of the AR PSA (as defined below) and the PIPE Transaction; and

 

(iv) provide for the assumption of the Company’s long-term incentive plan by PrairieCo prior to the effective time of the Merger.

 

Amended Purchase and Sale Agreement

 

On May 3, 2023, the Company entered into an Amended and Restated Purchase and Sale Agreement (the “AR PSA”) with PrairieCo and Exok to, among other things:

 

(i) reflect that the Exok Assets to be purchased by the Company for a total amount of $3,000,000 will consist of approximately 3,157 net mineral acres in, on and under approximately 4,494 gross acres;

 

(ii) amend the effective date of the conveyance of the Exok Assets to be the Closing Date;

 

(iii) remove the issuance of $4,182,000 in total equity consideration to Exok, which consisted of (a) 836,4000 shares of Common Stock and (b) 836,400 warrants to purchase 836,400 shares of Common Stock at an exercise price of $6.00 per share; and

 

(iv) include an option of PrairieCo to purchase, from the Closing Date until the later of (x) the date that is ninety (90) days following the Closing Date and (y) August 15, 2023, approximately 20,327 net mineral acres in, on and under approximately 32,695 additional gross acres from Exok for a purchase price of $22,182,000, payable in (a) $18,000,000 in cash and (b) $4,182,000 in total equity consideration, consisting of (1) a number of shares of Common Stock equal to the quotient of $4,182,000 divided by the volume weighted average price for shares of Common Stock for twenty (20) consecutive trading days ending on the date such option is exercised by the Company and (2) an equal number of warrants to purchase shares of Common Stock.

 

The Merger and Exok Acquisition both closed on May 3, 2023. At the effective time of the Merger, membership interests in the Company were converted into the right to receive each member’s pro rate share of 65,647,676 shares of Common Stock and PrairieCo assumed and converted non-compensatory options to purchase membership interests of the Company into non-compensatory options to acquire 8,000,000 shares of Common Stock for $0.25 per share, which are only exercisable if specific production hurdles are achieved.

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Organization and Nature of Business (Details Narrative) - Subsequent Event [Member] - Prairie Operating Co LLC [Member]
May 03, 2023
USD ($)
a
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Area of land | a 23,485
Exok [Member]  
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Going Concern (Details Narrative) - Prairie Operating Co LLC [Member] - USD ($)
3 Months Ended
May 03, 2023
Mar. 31, 2023
Net loss   $ 64,392
Cash   79,762
Working capital deficit   2,418,970
Accumulated deficit   $ 445,912
Proceeds from the issuance of preferred stock $ 17,300,000  
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Commitments and Contingencies (Details Narrative)
3 Months Ended
Mar. 31, 2023
USD ($)
Prairie Operating Co LLC [Member]  
Expenses $ 10,000
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Sale of Options (Details Narrative) - Prairie Operating Co LLC [Member]
Aug. 31, 2022
USD ($)
BOED
Membership interest 40.00%
Purchase of non compensatory options | $ $ 1,000,000
Sale of non compensatory options | $ $ 80,000
Non compensatory options expire date Aug. 31, 2027
Restricted options exercisable increments percentage 25.00%
Barrels of oil equivalent per day one 2,500
Barrels of oil equivalent per day two 5,000
Barrels of oil equivalent per day three 7,500
Barrels of oil equivalent per day four 10,000
XML 22 R15.htm IDEA: XBRL DOCUMENT v3.23.1
Subsequent Events (Details Narrative) - Prairie Operating Co LLC [Member]
Aug. 15, 2023
USD ($)
a
shares
May 03, 2023
USD ($)
a
$ / shares
shares
Aug. 31, 2022
USD ($)
Subsequent Event [Line Items]      
Purchase of non compensatory options     $ 1,000,000
Membership interest     40.00%
Amended Purchase And Sale Agreement [Member] | Forecast [Member]      
Subsequent Event [Line Items]      
Area of land | a 20,327    
Total equity consideration $ 4,182,000    
Shares issued | shares 1    
Class of warrant or right, outstanding | shares 2    
Purchase price $ 22,182,000    
Cash $ 18,000,000    
Amended Purchase And Sale Agreement [Member] | Exok [Member] | Forecast [Member]      
Subsequent Event [Line Items]      
Area of land | a 32,695    
Subsequent Event [Member]      
Subsequent Event [Line Items]      
Reverse stock split   ratio between 1-23 and 1-30  
Area of land | a   23,485  
Subsequent Event [Member] | Exok [Member]      
Subsequent Event [Line Items]      
Payments to acquire land held for use   $ 28,182,000  
Area of land | a   37,030  
Cash   $ 24,000,000  
Subsequent Event [Member] | Amended Purchase And Sale Agreement [Member]      
Subsequent Event [Line Items]      
Payments to acquire land held for use   $ 3,000,000  
Area of land | a   3,157  
Total equity consideration   $ 4,182,000  
Shares issued | shares   836.4000  
Class of warrant or right, outstanding | shares   836,400  
Exercise price | $ / shares   $ 6.00  
Membership interests converted shares | shares   65,647,676  
Non compensatory options acquire, shares | shares   8,000,000  
Share price | $ / shares   $ 0.25  
Subsequent Event [Member] | Amended Purchase And Sale Agreement [Member] | Exok [Member]      
Subsequent Event [Line Items]      
Area of land | a   4,494  
Bristol Capital LLC [Member] | Subsequent Event [Member]      
Subsequent Event [Line Items]      
Purchase of non compensatory options   $ 24,000  
Membership interest   30.00%  
Third Party Investor [Member] | Subsequent Event [Member]      
Subsequent Event [Line Items]      
Purchase of non compensatory options   $ 8,000  
Membership interest   10.00%  
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Classen Boulevard Oklahoma City OK 73114 435 900-1949 false false false false false The sole purpose of this Amendment No. 2 is to incorporate iXBRL tagging performed against Exhibit 99.2 filed herewith. No other changes have been made, and it does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosures previously made. 0001162896 true 8-K/A 2023-03-31 DE 79762 79762 1973058 2052820 2496648 2084 2498732 2498732 -445912 -445912 2052820 64392 64392 -64392 -381520 -64392 -445912 -64392 64309 -83 -83 79845 79762 178893 33501 <p id="xdx_805_eus-gaap--BusinessDescriptionAndBasisOfPresentationTextBlock_z0ck9ErMy5Mk" style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 1 – <span><span id="xdx_82E_zPHpdo1NkHBh">Organization and Nature of Business</span></span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b/></span> </p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Organization and General</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prairie Operating Co., LLC (the “Company”) is a limited liability company formed under the laws of the State of Delaware on June 7, 2022. The Company was formed for the purpose of acquiring and operating oil and gas properties in the United States.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of March 31, 2023, the Company had not commenced any operations. All activity for the period from June 7, 2022 (inception) to March 31, 2023, relates to the Company’s formation, the Merger (as defined below) and the Exok Acquisition (see Notes 1 and 5). As of March 31, 2023, the Company did not generate any operating revenues.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Merger Agreement</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On October 24, 2022, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with Prairie Operating Co., a Delaware corporation (“PrairieCo”), and Creek Road Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), pursuant to which Merger Sub merged with and into the Company (the “Merger”), with the Company surviving and continuing to exist as a Delaware limited liability company and a wholly-owned subsidiary of PrairieCo. The Merger closed on May 3, 2023 (the “Closing Date”). See Note 5 for further discussion.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Acquisition of Oil and Gas Properties</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Concurrently with entering into the Merger Agreement, the Company entered into a purchase and sale agreement (the “PSA”) with Exok, Inc. (“Exok”) to acquire certain oil and gas leasehold interests (the “Exok Assets”) covering <span id="xdx_90A_eus-gaap--AreaOfLand_iI_uacre_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zUo1XJXSqrj1" title="Area of land">23,485</span> net acres and <span id="xdx_906_eus-gaap--AreaOfLand_iI_uacre_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--ExokMember_zzdsuB6y7nc4" title="Area of land">37,030</span> gross acres in Weld County, Colorado in exchange for $<span id="xdx_908_eus-gaap--PaymentsToAcquireLandHeldForUse_c20230503__20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--ExokMember_zG3Ie6gSPRKj" title="Payments to acquire land held for use">28,182,000</span> payable as (i) $<span id="xdx_90C_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents_iI_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--ExokMember_zon8595fZz5e" title="Cash">24,000,000</span> in cash and (ii) $<span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodValueAcquisitions_c20230503__20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--ExokMember_zxN49m0dQPkb" title="Issuance of common stock and warrants">4,182,000</span> in shares of common stock of PrairieCo (“Common Stock”) and warrants to purchase shares of Common Stock (the “Exok Acquisition”). The Exok Acquisition closed on May 3, 2023. See Note 5 for further discussion.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 23485 37030 28182000 24000000 4182000 <p id="xdx_801_eus-gaap--SubstantialDoubtAboutGoingConcernTextBlock_zMqBVEIni32e" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 2 – <span><span id="xdx_82C_zlijdOgUeqY2">Going Concern</span></span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span> </span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span/></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since its inception, the Company has incurred significant losses. The Company had a net loss of $<span id="xdx_90A_eus-gaap--NetIncomeLoss_iN_di_c20230101__20230331_zoKr6ThDam6k" title="Net loss">64,392</span> for the three months ended March 31, 2023. We cannot predict if we will be profitable. We may continue to incur losses for an indeterminate period of time and may be unable to achieve profitability. An extended period of losses and negative cash flow may prevent us from successfully operating and expanding our business. We may be unable to achieve or sustain profitability on an ongoing basis. On March 31, 2023, we had cash of $<span id="xdx_90F_eus-gaap--Cash_iI_c20230331_zTcIWeJfpzh1" title="Cash">79,762</span>, a working capital deficit of $<span id="xdx_908_ecustom--WorkingCapitalDeficit_iNI_di_c20230331_z7U8jnNux3ai" title="Working capital deficit">2,418,970</span>, and a members’ deficit of $<span id="xdx_901_eus-gaap--RetainedEarningsAccumulatedDeficit_iNI_di_c20230331_zP5J4AUvUtp7" title="Accumulated deficit">445,912</span>. Upon closing of the Merger and related transactions on May 3, 2023, PrairieCo received proceeds from the issuance of preferred stock of $<span id="xdx_901_eus-gaap--ProceedsFromIssuanceOfPreferredStockAndPreferenceStock_pn5n6_c20230503__20230503_zgkOEJugVcSe" title="Proceeds from the issuance of preferred stock">17.3</span> million. A majority of these proceeds remain within PrairieCo after the Merger and related transactions for use in its business. <br/> <br/></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The assessment of the liquidity and going concern requires the Company to make estimates of future activity and judgments about whether the Company can meet its obligations and has adequate liquidity to operate. Significant assumptions used in Company’s forecasted model of liquidity in the next 12 months include PrairieCo’s current cash position, inclusive of the impacts from the Merger and related transactions discussed above, its ability to obtain funding from PrairieCo, and its ability to manage spending. Based on an assessment of these factors, management believes that the Company will have adequate liquidity for its operations for at least the next 12 months.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the matters discussed herein.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> -64392 79762 -2418970 -445912 17300000 <p id="xdx_804_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zlBzkFZLxPs3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 3 – <span><span id="xdx_825_zBlQhRWVApqh">Commitments and Contingencies</span></span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span> </span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span/></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company reimbursed members and others for reasonable, documented and customary out-of-pocket expenses incurred in connection with services provided related to the Company’s formation, the Merger and the Exok Acquisition (see Notes 1 and 5) upon closing. As of March 31, 2023, such expenses were approximately $<span id="xdx_906_eus-gaap--LitigationSettlementExpense_c20230101__20230331_zSKJOVWGoRy9" title="Expenses">10,000</span> and were not included in the financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 10000 <p id="xdx_80A_ecustom--SaleOfOptionsTextBlock_zfWwx6rkD2T8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 4 – <span id="xdx_82A_zr3k900yp4o9">Sale of Options</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On August 31, 2022, the Company entered into agreements with its members whereby each member was provided non-compensatory options to purchase a <span id="xdx_903_ecustom--NonCompensatoryOptionsToPurchaseMembershipInterest_iI_pid_dp_c20220831_zzQxwbOcesL6" title="Membership interest">40</span>% membership interest in the Company for $<span id="xdx_90D_ecustom--PurchaseOfNonCompensatoryOptions_c20220831__20220831_zTlcPFDh6tYg" title="Purchase of non compensatory options">1,000,000</span>. The non-compensatory options were sold for $<span id="xdx_90F_ecustom--SaleOfNonCompensatoryOptions_c20220831__20220831_zpxYZInb4JQl" title="Sale of non compensatory options">80,000</span> in total and expire on <span id="xdx_90B_ecustom--NonCompensatoryOptionsExpireDate_dd_c20220831__20220831_zF7hzOTYgQ5h" title="Non compensatory options expire date">August 31, 2027</span>. The restricted options only become exercisable in <span id="xdx_90C_ecustom--RestrictedOptionsExercisableIncrementsPercentage_iI_pid_dp_c20220831_zo7jxusaiXZj" title="Restricted options exercisable increments percentage">25</span>% increments upon the achievement of the following production milestones in barrels of oil equivalent per day (“BOE/D”): <span id="xdx_906_ecustom--BarrelsOfOilEquivalentPerDayOne_uBOED_c20220831__20220831_zeS2gk8Umdy7" title="Barrels of oil equivalent per day one">2,500</span> BOE/D, <span id="xdx_90F_ecustom--BarrelsOfOilEquivalentPerDayTwo_uBOED_c20220831__20220831_znOMIOWOEm7" title="Barrels of oil equivalent per day two">5,000</span> BOE/D, <span id="xdx_906_ecustom--BarrelsOfOilEquivalentPerDayThree_uBOED_c20220831__20220831_zPCYR4Xiqya4" title="Barrels of oil equivalent per day three">7,500</span> BOE/D, and <span id="xdx_905_ecustom--BarrelsOfOilEquivalentPerDayFour_uBOED_c20220831__20220831_zJPsToJcL3Eh" title="Barrels of oil equivalent per day four">10,000</span> BOE/D.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> 0.40 1000000 80000 2027-08-31 0.25 2500 5000 7500 10000 <p id="xdx_80D_eus-gaap--SubsequentEventsTextBlock_zbB3AbnE6Tu7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 5 – <span id="xdx_827_zXBMVUhZLI5l">Subsequent Events</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Non-Compensatory Options</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On May 3, 2023, prior to the closing of the Merger, the Company entered into a non-compensatory option purchase agreement with its members, Bristol Capital LLC (“Bristol”) and a third party investor pursuant to which Bristol and such third party investor purchased non-compensatory options for $<span id="xdx_904_ecustom--PurchaseOfNonCompensatoryOptions_c20230503__20230503__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--BristolCapitalLLCMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_z4YRbdoZ4LLd" title="Purchase of non compensatory options">24,000</span> and $<span id="xdx_908_ecustom--PurchaseOfNonCompensatoryOptions_c20230503__20230503__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--ThirdPartyInvestorMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zoSylHLPPSM9" title="Purchase of non compensatory options">8,000</span>, respectively, from the Company’s members. Following such purchase, each member of Prairie owns non-compensatory options to purchase a <span id="xdx_905_ecustom--NonCompensatoryOptionsToPurchaseMembershipInterest_iI_pid_dp_c20230503__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--BristolCapitalLLCMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zf8MahLQXO5d" title="Membership interest">30</span>% membership interest in the Company, Bristol owns non-compensatory options to purchase a <span id="xdx_901_ecustom--NonCompensatoryOptionsToPurchaseMembershipInterest_iI_pid_dp_c20230503__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--BristolCapitalLLCMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zBoxOE1mtYLl" title="Membership interest">30</span>% membership interest in the Company and a third party investors owns non-compensatory options to purchase a <span id="xdx_90D_ecustom--NonCompensatoryOptionsToPurchaseMembershipInterest_iI_pid_dp_c20230503__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--ThirdPartyInvestorMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zB2oLB3On7c8" title="Membership interest">10</span>% membership interest in the Company.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Amended and Restated Merger Agreement</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On May 3, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “AR Merger Agreement”) with PrairieCo and Merger Sub to, among other things:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i) r<span style="background-color: white">emove the reverse stock split of the shares of Common Stock, at a <span id="xdx_909_eus-gaap--StockholdersEquityReverseStockSplit_c20230503__20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zV82TNfnvcJ4" title="Reverse stock split">ratio between 1-23 and 1-30</span> that was contemplated to occur as part of a series of restructuring transactions prior to the consummation of a contemplated sale of PrairieCo’s securities to certain investors in a private placement (the “PIPE Transaction”);</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii) <span style="background-color: white">amend the date by which the AR Merger Agreement may be terminated by either </span>PrairieCo <span style="background-color: white">or the Company if the Merger has not been consummated to on or before September 30, 2023;</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">(iii) reflect the terms of the AR PSA (as defined below) and the PIPE Transaction; and</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">(iv) provide for the assumption of the Company’s long-term incentive plan by PrairieCo prior to the effective time of the Merger.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Amended Purchase and Sale Agreement</i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On May 3, 2023, the Company entered into an Amended and Restated Purchase and Sale Agreement (the “AR PSA”) with PrairieCo and Exok to, among other things:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i) <span style="background-color: white">reflect that the Exok Assets to be purchased by the Company for a total amount of $<span id="xdx_902_eus-gaap--PaymentsToAcquireLandHeldForUse_c20230503__20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zofzmwd9K6q4" title="Payments to acquire land held for use">3,000,000</span> will consist of approximately <span id="xdx_903_eus-gaap--AreaOfLand_iI_uacre_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zUxOhDZzPx7d" title="Area of land">3,157</span> net mineral acres in, on and under approximately <span id="xdx_905_eus-gaap--AreaOfLand_iI_uacre_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--BusinessAcquisitionAxis__custom--ExokMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zScFBPdRo8Dh" title="Area of land">4,494</span> gross acres;</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii) <span style="background-color: white">amend the effective date of the conveyance of the Exok Assets to be the Closing Date;</span></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">(iii) remove the issuance of $<span id="xdx_90D_eus-gaap--BusinessCombinationConsiderationTransferred1_c20230503__20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zpTV8sZdls55" title="Total equity consideration">4,182,000</span> in total equity consideration to Exok, which consisted of (a) <span id="xdx_904_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20230503__20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zhiIK1K8Sji5" title="Shares issued">836,4000</span> shares of Common Stock and (b) <span id="xdx_907_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zW0l0cOtRJp6" title="Warrants to purchase">836,400</span> warrants to purchase <span id="xdx_90B_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zlsAbd2c977d" title="Warrants to purchase">836,400</span> shares of Common Stock at an exercise price of $<span id="xdx_901_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zFMfd7sC5Bsf" title="Exercise price">6.00</span> per share; and</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">(iv) include an option of PrairieCo to purchase, from the Closing Date until the later of (x) the date that is ninety (90) days following the Closing Date and (y) August 15, 2023, approximately <span id="xdx_909_eus-gaap--AreaOfLand_iI_uacre_c20230815__srt--StatementScenarioAxis__srt--ScenarioForecastMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zC2mbxYCb5m2" title="Area of land">20,327</span> net mineral acres in, on and under approximately <span id="xdx_90F_eus-gaap--AreaOfLand_iI_uacre_c20230815__srt--StatementScenarioAxis__srt--ScenarioForecastMember__us-gaap--BusinessAcquisitionAxis__custom--ExokMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zg4YP0Sdxzzk" title="Area of land">32,695</span> additional gross acres from Exok for a purchase price of $<span id="xdx_90C_eus-gaap--AssetAcquisitionConsiderationTransferredTransactionCost_c20230815__20230815__srt--StatementScenarioAxis__srt--ScenarioForecastMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zNMuvFD28TFc" title="Purchase price">22,182,000</span>, payable in (a) $<span id="xdx_909_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents_iI_c20230815__srt--StatementScenarioAxis__srt--ScenarioForecastMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zxl3Ecx42FO3" title="Cash">18,000,000</span> in cash and (b) $<span id="xdx_90D_eus-gaap--BusinessCombinationConsiderationTransferred1_c20230815__20230815__srt--StatementScenarioAxis__srt--ScenarioForecastMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zG9tnLE7jLMb" title="Total equity consideration">4,182,000</span> in total equity consideration, consisting of (<span id="xdx_90A_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20230815__20230815__srt--StatementScenarioAxis__srt--ScenarioForecastMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zLlkkJOuFKJe" title="Shares issued">1</span>) a number of shares of Common Stock equal to the quotient of $<span id="xdx_90E_eus-gaap--BusinessCombinationConsiderationTransferred1_c20230815__20230815__srt--StatementScenarioAxis__srt--ScenarioForecastMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zvHfIh88wEL2" title="Total equity consideration">4,182,000</span> divided by the volume weighted average price for shares of Common Stock for twenty (20) consecutive trading days ending on the date such option is exercised by the Company and (<span id="xdx_905_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_c20230815__srt--StatementScenarioAxis__srt--ScenarioForecastMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zXnL2oxUlxWi" title="Class of warrant or right, outstanding">2</span>) an equal number of warrants to purchase shares of Common Stock.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Merger and Exok Acquisition both closed on May 3, 2023. At the effective time of the Merger, membership interests in the Company were converted into the right to receive each member’s pro rate share of <span id="xdx_905_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20230503__20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zUUjop64uWV6" title="Membership interests converted shares">65,647,676</span> shares of Common Stock and PrairieCo assumed and converted non-compensatory options to purchase membership interests of the Company into non-compensatory options to acquire <span id="xdx_903_ecustom--StockIssuedDuringPeriodSharesNonCompensatoryOptionsAcquire_c20230503__20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_z2GUrZKKTnAg" title="Non compensatory options acquire, shares">8,000,000</span> shares of Common Stock for $<span id="xdx_904_eus-gaap--SharePrice_iI_c20230503__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__us-gaap--TypeOfArrangementAxis__custom--AmendedPurchaseAndSaleAgreementMember_zYKpV3uzefb2" title="Share price">0.25</span> per share, which are only exercisable if specific production hurdles are achieved.</span></p> 24000 8000 0.30 0.30 0.10 ratio between 1-23 and 1-30 3000000 3157 4494 4182000 836.4000 836400 836400 6.00 20327 32695 22182000 18000000 4182000 1 4182000 2 65647676 8000000 0.25 EXCEL 24 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx M4$L#!!0 ( $:(T%8'04UB@0 +$ 0 9&]C4')O<',O87!P+GAM M;$V./0L",1!$_\IQO;=!P4)B0-!2L+(/>QLOD&1#LD)^OCG!CVX>;QA&WPIG M*N*I#BV&5(_C(I(/ !47BK9.7:=N')=HI6-Y #OGDK7A.YNJQ<&4GPZ4A!0W_J=0U[R;UEA_6\#MI7E!+ P04 M " !&B-!6%(1N'NX K @ $0 &1O8U!R;W!S+V-O&ULS9+! 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