Cover
Cover | 7 Months Ended |
Dec. 31, 2022 | |
Cover [Abstract] | |
Document Type | 8-K/A |
Amendment Flag | true |
Amendment Description | Amendment No.1 |
Document Period End Date | Dec. 31, 2022 |
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 |
Balance Sheet
Balance Sheet - Prairie Operating Co LLC [Member] | Dec. 31, 2022 USD ($) |
Current Assets | |
Cash | $ 79,845 |
Total Current Assets | 79,845 |
Other Assets | |
Deferred transaction costs | 1,760,665 |
Total Assets | 1,840,510 |
Current Liabilities | |
Total Current Liabilities | 2,222,030 |
Total Long-Term Liabilities | |
Total Liabilities | 2,222,030 |
Commitments and contingencies (Note 4) | |
Members’ Deficit | (381,520) |
Total Members’ Deficit | (381,520) |
Total Liabilities and Members’ Deficit | 1,840,510 |
Nonrelated Party [Member] | |
Current Liabilities | |
Accrued expenses – related party | 2,219,946 |
Related Party [Member] | |
Current Liabilities | |
Accrued expenses – related party | $ 2,084 |
Statement of Operations
Statement of Operations - Prairie Operating Co LLC [Member] | 7 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenues | |
Expenses | |
Operating expenses | |
General and administrative expenses | 461,520 |
Total Expenses | 461,520 |
Net Loss | $ (461,520) |
Statement of Members' Deficit
Statement of Members' Deficit - Prairie Operating Co LLC [Member] | 7 Months Ended |
Dec. 31, 2022 USD ($) | |
Balance - June 7, 2022 (date of inception) | |
Capital contributions | 80,000 |
Net loss | (461,520) |
Balance - December 31, 2022 | $ (381,520) |
Statement of Cash Flows
Statement of Cash Flows - Prairie Operating Co LLC [Member] | 7 Months Ended |
Dec. 31, 2022 USD ($) | |
Cash Flows from Operating Activities | |
Net loss | $ (461,520) |
Changes in operating assets and liabilities: | |
Increase in accounts payable and accrued expenses | 461,365 |
Cash used in operating activities | (155) |
Cash Flows from Financing Activities | |
Proceeds from sale of options | 80,000 |
Cash provided by investing activities | 80,000 |
Net increase in cash | 79,845 |
Cash – beginning of period | |
Cash – end of period | 79,845 |
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 | 1,350,744 |
Accrued deferred transaction costs associated with the PIPE Transaction | $ 409,921 |
Organization and Nature of Busi
Organization and Nature of Business | 7 Months Ended |
Dec. 31, 2022 | |
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 December 31, 2022, the Company had not commenced any operations. All activity for the period from June 7, 2022 (inception) to December 31, 2022, relates to the Company’s formation, the Merger (as defined below) and the Exok Acquisition (see Notes 1 and 6). As of December 31, 2022, the Company did not generate any operating revenues. The Company has selected December 31 as its fiscal year end. 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 6 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 37,030 28,182,000 24,000,000 4,182,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 7 Months Ended |
Dec. 31, 2022 | |
Prairie Operating Co LLC [Member] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. Cash and cash equivalents For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid debt instruments purchased with an original maturity of three months or less. Accounts Receivable and Allowance for Doubtful Accounts It is the Company’s policy to record accounts receivable at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of December 31, 2022, there were no no Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures A fair value hierarchy prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs, other than the quoted prices in active markets, are observable either directly or indirectly. Level 3 – Unobservable inputs based on the Company’s assumptions. The Company is required to use observable market data if such data is available without undue cost and effort. The carrying amount of the Company’s cash and cash equivalents approximates fair value as of December 31, 2022. Transactions involving related parties typically cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Deferred Transaction Costs Deferred transaction costs are expenses directly related to the Merger and related transactions. These costs primarily consist of legal and accounting fees that the Company capitalized. On the date of the Merger, deferred transaction costs related to the PIPE Transaction will be reclassified to equity and the deferred transaction costs related directly to the Merger will be reclassified to the cost of the net assets acquired in the Merger. Accrued Expenses Accrued expenses in our balance sheet consist of $ 2,210,094 in legal costs, $ 9,552 in accounting costs, and $ 300 of other costs. Income Taxes The Company is a limited liability company treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits of the Company being passed through to the members. As such, no recognition of federal or state income taxes for the Company have been provided for in the accompanying financial statements. Any uncertain tax position taken by the member is not an uncertain position of the Company. Related Parties The Company follows ASC 850-10, Related Parties, for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act of 1933, as amended); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Recently Issued Accounting Pronouncements Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Going Concern
Going Concern | 7 Months Ended |
Dec. 31, 2022 | |
Prairie Operating Co LLC [Member] | |
Going Concern | Note 3 – Going Concern Since its inception, the Company has incurred significant losses. The Company had a net loss of $ 461,520 79,845 2,142,184 381,520 17.3 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. |
Commitments and Contingencies
Commitments and Contingencies | 7 Months Ended |
Dec. 31, 2022 | |
Prairie Operating Co LLC [Member] | |
Commitments and Contingencies | Note 4 – 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 6) upon closing. As of December 31, 2022, such expenses were approximately $ 10,000 |
Sale of Options
Sale of Options | 7 Months Ended |
Dec. 31, 2022 | |
Prairie Operating Co LLC [Member] | |
Sale of Options | Note 5 – 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 1,000,000 80,000 August 31, 2027 25 2,500 5,000 7,500 10,000 |
Subsequent Events
Subsequent Events | 7 Months Ended |
Dec. 31, 2022 | |
Prairie Operating Co LLC [Member] | |
Subsequent Events | Note 6 – 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 8,000 30 30 10 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) r emove the reverse stock split of the shares of Common Stock, at a ratio between 1-23 and 1-30 (ii) amend the date by which the AR Merger Agreement may be terminated by either 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 3,157 4,494 (ii) amend the effective date of the conveyance of the Exok Assets to be the Closing Date; (iii) remove the issuance of $ 4,182,000 836,4000 836,400 836,400 6.00 (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 32,695 22,182,000 18,000,000 4,182,000 1 4,182,000 2 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 8,000,000 0.25 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) - Prairie Operating Co LLC [Member] | 7 Months Ended |
Dec. 31, 2022 | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. |
Cash and cash equivalents | Cash and cash equivalents For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid debt instruments purchased with an original maturity of three months or less. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts It is the Company’s policy to record accounts receivable at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of December 31, 2022, there were no no |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures A fair value hierarchy prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs, other than the quoted prices in active markets, are observable either directly or indirectly. Level 3 – Unobservable inputs based on the Company’s assumptions. The Company is required to use observable market data if such data is available without undue cost and effort. The carrying amount of the Company’s cash and cash equivalents approximates fair value as of December 31, 2022. Transactions involving related parties typically cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. |
Deferred Transaction Costs | Deferred Transaction Costs Deferred transaction costs are expenses directly related to the Merger and related transactions. These costs primarily consist of legal and accounting fees that the Company capitalized. On the date of the Merger, deferred transaction costs related to the PIPE Transaction will be reclassified to equity and the deferred transaction costs related directly to the Merger will be reclassified to the cost of the net assets acquired in the Merger. |
Accrued Expenses | Accrued Expenses Accrued expenses in our balance sheet consist of $ 2,210,094 in legal costs, $ 9,552 in accounting costs, and $ 300 of other costs. |
Income Taxes | Income Taxes The Company is a limited liability company treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits of the Company being passed through to the members. As such, no recognition of federal or state income taxes for the Company have been provided for in the accompanying financial statements. Any uncertain tax position taken by the member is not an uncertain position of the Company. |
Related Parties | Related Parties The Company follows ASC 850-10, Related Parties, for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act of 1933, as amended); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Organization and Nature of Bu_2
Organization and Nature of Business (Details Narrative) - Subsequent Event [Member] - Prairie Operating Co LLC [Member] | May 03, 2023 USD ($) a |
Subsequent Event [Line Items] | |
Area of land | a | 23,485 |
Exok [Member] | |
Subsequent Event [Line Items] | |
Area of land | a | 37,030 |
Payments to acquire land held for use | $ 28,182,000 |
Cash | 24,000,000 |
Issuance of common stock and warrants | $ 4,182,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - Prairie Operating Co LLC [Member] | 7 Months Ended |
Dec. 31, 2022 USD ($) | |
Accounts receivable | $ 0 |
Allowance for doubtful accounts | 0 |
Legal Fees | 2,210,094 |
[custom:AccountingCosts] | 9,552 |
Other Cost and Expense, Operating | $ 300 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - Prairie Operating Co LLC [Member] - USD ($) | 7 Months Ended | |
May 03, 2023 | Dec. 31, 2022 | |
Net loss | $ 461,520 | |
Cash | 79,845 | |
Working capital deficit | 2,142,184 | |
Accumulated deficit | $ 381,520 | |
Proceeds from the issuance of preferred stock | $ 17,300,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 7 Months Ended |
Dec. 31, 2022 USD ($) | |
Prairie Operating Co LLC [Member] | |
Expenses | $ 10,000 |
Sale of Options (Details Narrat
Sale of Options (Details Narrative) - Prairie Operating Co LLC [Member] | Aug. 31, 2022 USD ($) BOED |
Membership interest | 40% |
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% |
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 |
Subsequent Events (Details Narr
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% | ||
Amended Purchase And Sale Agreement [Member] | Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Area of land | a | 20,327 | ||
Shares issued | shares | 1 | ||
Class of warrant or right, outstanding | shares | 2 | ||
Purchase price | $ 22,182,000 | ||
Cash | 18,000,000 | ||
Total equity consideration | $ 4,182,000 | ||
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 | ||
Value issued | $ 4,182,000 | ||
Shares issued | shares | 836.4000 | ||
Class of warrant or right, outstanding | shares | 836,400 | ||
Exercise price | $ / shares | $ 6 | ||
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% | ||
Third Party Investor [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Purchase of non compensatory options | $ 8,000 | ||
Membership interest | 10% |