Common Stock Options and Warrants	6 Months Ended
Jun. 30, 2024
Common Stock Options And Warrants
Common Stock Options and Warrants	Note 13 – Common Stock Options and Warrants Merger Options On August 31, 2022, Prairie LLC entered into agreements with its members whereby each member was provided non–compensatory options to purchase a 40% membership interest in the Company for an aggregate purchase price of $1,000,000 per member. The non–compensatory options were sold for $80,000. The non–compensatory 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. On May 3, 2023, prior to the closing of the Merger, Prairie LLC entered into a non–compensatory option purchase agreement with its members, Bristol Capital, LLC (“Bristol Capital”), which manages Bristol Investment described above, and BOKA Energy LP (“BOKA”), a third–party investor, pursuant to which Bristol Capital and BOKA purchased non–compensatory options for $24,000 and $8,000, respectively, from Prairie LLC’s members. Upon the Merger, the Company converted the non–compensatory options to purchase the outstanding and unexercised membership interests of Prairie LLC, as of immediately prior to the Merger, into options to acquire an aggregate of 8,000,000 shares of common stock for an exercise price of $0.25 per share (the “Merger Options”), which are only exercisable if the production hurdles noted above are achieved. The Company then entered into amended and restated non–compensatory option agreements (the “Option Agreements”) with each of Gary C. Hanna, Edward Kovalik, Bristol Capital, and BOKA. An aggregate of 2,000,000 Merger Options are subject to be transferred to the Series D PIPE Investors, based on their then percentage ownership of the Series D Preferred Stock to the aggregate Series D Preferred Stock outstanding and held by all Series D PIPE Investors as of the May 3, 2023, if the Company does not meet certain performance metrics by May 3, 2026. On August 30, 2023, the Company, Gary C. Hanna, Edward Kovalik, Bristol Capital, and Georgina Asset Management entered into a non–compensatory option purchase agreement, pursuant to which Georgina Asset Management agreed to purchase, and each of the sellers agreed to sell to Georgina Asset Management Merger Options to acquire an aggregate of 200,000 shares of common stock, for an exercise price of $0.25 per share for an aggregate purchase price of $2,000. None of the Merger Options were exercisable at June 30, 2024 or December 31, 2023. Legacy Warrants Upon the Merger, the Company assumed warrants to purchase 53,938 shares of the Company’s common stock with a weighted average exercise price of $49.71 per share (the “Legacy Warrants”). As of June 30, 2024 and December 31, 2023, Legacy Warrants providing the right to purchase 43,438 and 53,938 shares of common stock, respectively, were outstanding with a weighted average remaining contractual life of 2.1 and 2.2 years, respectively. Series D PIPE Warrants The Series D PIPE Warrants, upon issuance, provided the warrant holders with the right to purchase an aggregate of 6,950,500 shares of common stock at an exercise price of $6.00 per share. The Series D A Warrants expire on May 3, 2028 and the Series D B Warrants expire on May 3, 2024. All such warrants must be exercised for cash. On April 8, 2024, the Company entered into an Amendment and Waiver of Exercise Limitations Letter Agreement (the “Letter Agreement”) with Bristol Investment to amend certain terms of the Series D A Warrants and Series D B Warrants held by Bristol Investment. Each of the Series D PIPE Warrants held by Bristol Investment is subject to a limitation on exercise if as a result of such exercise or conversion, the holder would own more than 4.99% of the outstanding shares of the Company’s common stock, which may be increased by the holder upon written notice to the Company, to any specified percentage not in excess of 9.99% (the “Beneficial Ownership Limitation Ceiling”). The Letter Agreement increases the Beneficial Ownership Limitation Ceiling from 9.99% to 19.99%. Pursuant to the Letter Agreement, Bristol Investment further notified the Company of its intent to immediately increase the Beneficial Ownership Limitation Ceiling to 19.99% and the parties agreed to waive the waiting period with respect to such notice. During the three and six months ended June 30, 2024, Series D A Warrants to purchase 179,489 shares of common stock were exercised for total proceeds to the Company of $1.1 million. During the three and six months ended June 30, 2024, Series D B Warrants to purchase 656,640 and 1,400,250 shares of common stock, respectively, were exercised for total proceeds to the Company of $3.9 million and $8.4 million, respectively. As of June 30, 2024 and December 31, 2023, Series D A Warrants providing the right to purchase 3,225,761 and 3,405,250 shares of common stock, respectively, were outstanding with a remaining contractual life of 3.8 and 4.3 years, respectively. As of June 30, 2024, all of the Series D B Warrants have been exercised and as of December 31, 2023, Series D B Warrants providing the right to purchase 1,400,250 shares of common stock were outstanding with a remaining contractual life of 0.3 years. Series E PIPE Warrants The Series E PIPE Warrants provide the warrant holders with the right to purchase 8,000,000 shares of common stock at an exercise price of $6.00 per share. The Series E A Warrants expire on August 15, 2028 and the Series E B Warrants expire on August 15, 2024. All such warrants must be exercised for cash. As of June 30, 2024 and December 31, 2023, Series E A Warrants providing the right to purchase 4,000,000 shares of common stock with a remaining contractual life of 4.1 and 4.6 years, respectively, were outstanding and Series E B Warrants providing the right to purchase 4,000,000 shares of common stock with a remaining contractual life of 0.1 and 0.6 years, respectively, were outstanding. Exok Warrants As discussed in Note 4 – Acquisitions and Merger, the Company issued warrants in connection with the Exok Transaction completed in August 2023. The Exok Warrants provide the warrant holders with the right to purchase 670,499 shares of common stock at an exercise price of $7.43 per share. The Exok Warrants expire on August 15, 2028 and may be exercised in a cashless manner under certain circumstances. At June 30, 2024 and December 31, 2023, Exok Warrants providing the right to purchase 670,499 shares of common stock with a remaining contractual life of 4.1 and 4.6 years, respectively, were outstanding.

Common Stock Options and Warrants

6 Months Ended

Jun. 30, 2024

Note 13 – Common Stock Options and Warrants

Merger Options

On August 31, 2022, Prairie LLC entered into agreements with its members whereby each member was provided non–compensatory options to purchase a 40% membership interest in the Company for an aggregate purchase price of $1,000,000 per member. The non–compensatory options were sold for $80,000. The non–compensatory 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.

On May 3, 2023, prior to the closing of the Merger, Prairie LLC entered into a non–compensatory option purchase agreement with its members, Bristol Capital, LLC (“Bristol Capital”), which manages Bristol Investment described above, and BOKA Energy LP (“BOKA”), a third–party investor, pursuant to which Bristol Capital and BOKA purchased non–compensatory options for $24,000 and $8,000, respectively, from Prairie LLC’s members.

Upon the Merger, the Company converted the non–compensatory options to purchase the outstanding and unexercised membership interests of Prairie LLC, as of immediately prior to the Merger, into options to acquire an aggregate of 8,000,000 shares of common stock for an exercise price of $0.25 per share (the “Merger Options”), which are only exercisable if the production hurdles noted above are achieved.

The Company then entered into amended and restated non–compensatory option agreements (the “Option Agreements”) with each of Gary C. Hanna, Edward Kovalik, Bristol Capital, and BOKA. An aggregate of 2,000,000 Merger Options are subject to be transferred to the Series D PIPE Investors, based on their then percentage ownership of the Series D Preferred Stock to the aggregate Series D Preferred Stock outstanding and held by all Series D PIPE Investors as of the May 3, 2023, if the Company does not meet certain performance metrics by May 3, 2026.

On August 30, 2023, the Company, Gary C. Hanna, Edward Kovalik, Bristol Capital, and Georgina Asset Management entered into a non–compensatory option purchase agreement, pursuant to which Georgina Asset Management agreed to purchase, and each of the sellers agreed to sell to Georgina Asset Management Merger Options to acquire an aggregate of 200,000 shares of common stock, for an exercise price of $0.25 per share for an aggregate purchase price of $2,000.

None of the Merger Options were exercisable at June 30, 2024 or December 31, 2023.

Legacy Warrants

Upon the Merger, the Company assumed warrants to purchase 53,938 shares of the Company’s common stock with a weighted average exercise price of $49.71 per share (the “Legacy Warrants”). As of June 30, 2024 and December 31, 2023, Legacy Warrants providing the right to purchase 43,438 and 53,938 shares of common stock, respectively, were outstanding with a weighted average remaining contractual life of 2.1 and 2.2 years, respectively.

Series D PIPE Warrants

The Series D PIPE Warrants, upon issuance, provided the warrant holders with the right to purchase an aggregate of 6,950,500 shares of common stock at an exercise price of $6.00 per share. The Series D A Warrants expire on May 3, 2028 and the Series D B Warrants expire on May 3, 2024. All such warrants must be exercised for cash.

On April 8, 2024, the Company entered into an Amendment and Waiver of Exercise Limitations Letter Agreement (the “Letter Agreement”) with Bristol Investment to amend certain terms of the Series D A Warrants and Series D B Warrants held by Bristol Investment. Each of the Series D PIPE Warrants held by Bristol Investment is subject to a limitation on exercise if as a result of such exercise or conversion, the holder would own more than 4.99% of the outstanding shares of the Company’s common stock, which may be increased by the holder upon written notice to the Company, to any specified percentage not in excess of 9.99% (the “Beneficial Ownership Limitation Ceiling”). The Letter Agreement increases the Beneficial Ownership Limitation Ceiling from 9.99% to 19.99%. Pursuant to the Letter Agreement, Bristol Investment further notified the Company of its intent to immediately increase the Beneficial Ownership Limitation Ceiling to 19.99% and the parties agreed to waive the waiting period with respect to such notice.

During the three and six months ended June 30, 2024, Series D A Warrants to purchase 179,489 shares of common stock were exercised for total proceeds to the Company of $1.1 million. During the three and six months ended June 30, 2024, Series D B Warrants to purchase 656,640 and 1,400,250 shares of common stock, respectively, were exercised for total proceeds to the Company of $3.9 million and $8.4 million, respectively.

As of June 30, 2024 and December 31, 2023, Series D A Warrants providing the right to purchase 3,225,761 and 3,405,250 shares of common stock, respectively, were outstanding with a remaining contractual life of 3.8 and 4.3 years, respectively. As of June 30, 2024, all of the Series D B Warrants have been exercised and as of December 31, 2023, Series D B Warrants providing the right to purchase 1,400,250 shares of common stock were outstanding with a remaining contractual life of 0.3 years.

Series E PIPE Warrants

The Series E PIPE Warrants provide the warrant holders with the right to purchase 8,000,000 shares of common stock at an exercise price of $6.00 per share. The Series E A Warrants expire on August 15, 2028 and the Series E B Warrants expire on August 15, 2024. All such warrants must be exercised for cash.

As of June 30, 2024 and December 31, 2023, Series E A Warrants providing the right to purchase 4,000,000 shares of common stock with a remaining contractual life of 4.1 and 4.6 years, respectively, were outstanding and Series E B Warrants providing the right to purchase 4,000,000 shares of common stock with a remaining contractual life of 0.1 and 0.6 years, respectively, were outstanding.

Exok Warrants

As discussed in Note 4 – Acquisitions and Merger, the Company issued warrants in connection with the Exok Transaction completed in August 2023. The Exok Warrants provide the warrant holders with the right to purchase 670,499 shares of common stock at an exercise price of $7.43 per share. The Exok Warrants expire on August 15, 2028 and may be exercised in a cashless manner under certain circumstances. At June 30, 2024 and December 31, 2023, Exok Warrants providing the right to purchase 670,499 shares of common stock with a remaining contractual life of 4.1 and 4.6 years, respectively, were outstanding.