United States securities and exchange commission logo
November 1, 2023
Edward Kovalik
Chief Executive Officer
Prairie Operating Co.
602 Sawyer Street, Suite 710
Houston, TX 77007
Re: Prairie Operating
Co.
Amendment No. 4 to
Registration Statement on Form S-1
Filed October 24,
2023
File No. 333-272743
Dear Edward Kovalik:
We have reviewed your amended registration statement and have the
following
comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Amendment No. 4 to Form S-1 filed October 24, 2023
General
1. Please file a dated
legal opinion as an exhibit to the registration statement.
Business
Factors Affecting Profitability, page 52
2. We note that you have
added disclosure that your "assumed cost to mine one Bitcoin is
approximately $11,000."
In that regard:
Please tell us why
you disclose an assumed cost to mine one Bitcoin of
approximately
$11,000 if your average breakeven cost to mine one Bitcoin in the
second quarter of
2023 was $14,872 per Bitcoin.
If your breakeven
price in the second quarter of 2023 was $14,872 per Bitcoin, please
explain why you
state that "as long as the Bitcoin price is higher than $11,000 on
average, [you]
would continue to operate [y]our mining machines and such operation
Edward Kovalik
Prairie Operating Co.
November 1, 2023
Page 2
would be economically beneficial to [you]" and "the estimate of
approximately
$11,000 is essentially the 'shutdown Bitcoin price' for [y]our
Bitcoin mining
business."
If $14,872 per Bitcoin is your most recently disclosed breakeven
cost, tell us why you
do not represent that as your "shutdown Bitcoin price."
3. Please tell us why you use a breakeven Bitcoin network hash rate of
344.15 EH/s, which
was the network hash rate on April 14, 2023, the date your Bitcoin mining
operations
were fully re-initiated, if the network hash rate has been on an upward
trend since that
date and is now significantly higher.
4. Please consider moving the paragraph at the end of this section that
begins with "These
price movements result in decreased cryptocurrency mining revenue and
increased
cryptocurrency mining costs..." so that it follows the second paragraph
in this section. At
the paragraph's current location, it is not clear what price movements
you are referencing.
5. Please revise your breakeven analysis to reflect all costs attributable
to your
cryptocurrency mining activities, including mining equipment costs. In
that regard we
note your statement on pages 5 and 9 that "the cost of obtaining new
cryptocurrency
mining equipment is capital intensive, and may increase." Additionally,
clarify whether
you finance the purchase of mining equipment and if so, reflect financing
costs in your
breakeven analysis.
Incorporation of Certain Documents by Reference, page 92
6. Please provide us with a detailed analysis of your eligibility to
incorporate by reference,
specifically as it relates to General Instruction VII.D.1(c) of Form S-1.
In this regard,
please note that incorporation by reference is not available for
registrants that during the
past three years were issuers for offerings of penny stock as defined in
Rule 3a51-1 of the
Exchange Act. Please advise or revise accordingly.
Please contact David Lin at 202-551-3552 or John Dana Brown at
202-551-3859 with
any questions.
Sincerely,
FirstName LastNameEdward Kovalik
Division of
Corporation Finance
Comapany NamePrairie Operating Co.
Office of Crypto
Assets
November 1, 2023 Page 2
cc: Joanna D. Enns
FirstName LastName