UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File No. 000-33383

Prairie Operating Co.

(Exact name of registrant as specified in its charter)

Delaware		98-0357690
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

55 Waugh Drive

Suite 400

Houston, TX

77007

(Address of principal executive offices)

(Zip Code)

(713) 424–4247

(Registrant’s telephone number, including area code)

N/A

(Former name, former address, and former fiscal year, if changed since last report)

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

Title of each Class		Trading Symbol(s)		Name of each Exchange on which registered
Common stock, $0.01 par value		PROP		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S–T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Title of Class		Number of Shares Outstanding on August 8, 2024
Common Stock, $0.01 par value		12,564,861

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	3
Item 1.	Condensed Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II	OTHER INFORMATION	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31

SIGNATURES		32

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Table of Contents		Page
Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023		4
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023		5
Condensed Consolidated Statements of Stockholders’ Equity/Members’ Deficit for the Three and Six Months Ended June 30, 2024 and 2023		6
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023		8
Notes to Condensed Consolidated Financial Statements		9
Note 1 – Organization, Description of Business, and Basis of Presentation		9
Note 2 – Summary of Significant Accounting Policies		10
Note 3 – Discontinued Operations		12
Note 4 – Acquisitions and Merger		13
Note 5 – Fair Value Measurements		15
Note 6 – Property and Equipment, net		16
Note 7 – Accounts Payable and Accrued Expenses		16
Note 8 – Long–term Debt		16
Note 9 – Leases		17
Note 10 – Commitments and Contingencies		18
Note 11 – Preferred Stock		18
Note 12 – Common Stock		19
Note 13 – Common Stock Options and Warrants		19
Note 14 – Long–Term Incentive Compensation		21
Note 15 – Related Party Transactions		23

Prairie Operating Co. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	2,226,478	$	13,036,950
Note receivable		503,500		—
Prepaid expenses and other current assets		249,145		171,486
Deferred financing costs		1,625,233		—
Current assets – discontinued operations		—		322,655
Total current assets		4,604,356		13,531,091

Property and equipment:
Oil and natural gas properties, successful efforts method of accounting including $33,370,317 and $28,705,404 excluded from amortization at June 30, 2024 and December 31, 2023, respectively		33,370,317		28,705,404
Less: Accumulated depreciation, depletion and amortization		—		—
Total property and equipment, net		33,370,317		28,705,404
Deposits on oil and natural gas property purchases		9,382,314		—
Operating lease assets		356,450		155,253
Note receivable – non–current		310,493		—
Deferred transaction costs		209,013		108,956
Non–current assets – discontinued operations		—		3,182,307
Total assets	$	48,232,943	$	45,683,011

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	12,338,555	$	5,374,494
Operating lease liabilities – current		167,842		41,890
Total current liabilities		12,506,397		5,416,384

Long–term liabilities:
Operating lease liabilities		175,509		93,816
Total long–term liabilities		175,509		93,816
Total liabilities		12,681,906		5,510,200

Commitments and contingencies (Note 10)		-		-

Stockholders’ equity:

Series D convertible preferred stock; $0.01 par value; 50,000 shares authorized and 16,507 and 20,627 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		165		206