SecProbe.io

United States securities and exchange commission logo
August 31, 2023
Edward Kovalik
Chief Executive Officer
Prairie Operating Co.
8636 N. Classen Boulevard
Oklahoma City, OK
Re:Prairie Operating Co.
Amendment No. 2 to Registration Statement on Form S-1
Filed August 25, 2023
File No. 333-272743
Dear Edward Kovalik:
            We have reviewed your amended registration statement and have the following
comments.  In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.
            Please respond to this letter by amending your registration statement and providing the
requested information.  If you do not believe our comments apply 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 these comments, we may have additional comments.  Unless we note
otherwise, our references to prior comments are to comments in our August 22, 2023 letter.
Amendment No. 2 to Form S-1 filed August 25, 2023
Risk Factors, page 6
1.We note your response to comment 1.  Please add a risk factor addressing the risk that the
crypto assets you mine or hold could be deemed securities and that the conclusions you
draw based on your risk-based assessment regarding the likelihood that a particular crypto
asset could be deemed a “security” under applicable laws could be incorrect.  Include a
discussion of what the legal implications would be and how it might impact you and your
investors.

 FirstName LastNameEdward Kovalik
 Comapany NamePrairie Operating Co.
 August 31, 2023 Page 2
 FirstName LastName
Edward Kovalik
Prairie Operating Co.
August 31, 2023
Page 2
We may not have sufficient authorized common stock available to issue the Common Stock that
is being offered for resale, page 19
2.Please tell us how counsel is able to opine that the Series D Shares, Series A Warrant
Shares, and Series B Warrant Shares will be validly issued if, as you state here, you may
be in violation of your charter if common stock underlying outstanding convertible or
exercisable securities, separate from the shares referenced above, is issued in an amount
that would make the number of your outstanding shares exceed the number of shares of
common stock authorized by your charter.
3.Please revise this risk factor to discuss the specific potential impacts for investors in this
offering, if you were to issue shares in an amount that would make the number of your
outstanding shares exceed the number of shares of common stock authorized by your
charter.
Management's Discussion and Analysis of Financial Condition and Results of Operations of
Prairie Operating Co., page 42
4.Please provide consistent and clear disclosure about the current status of your
cryptocurrency mining operations.  For example you state on page 55 that "[a]fter June 30,
2022, the Company ceased its cryptocurrency mining operations" and "Since June 30,
2022 the Company is neither receiving meaningful cryptocurrency awards nor generating
meaningful revenue from cryptocurrency mining," yet you later state that "[o]n March 2,
2023, the Company entered into the Master Services Agreement with Atlas and re-
initiated its cryptocurrency mining operations."
Factors Affecting Profitability, page 55
5.Refer to comment 3 and your revisions on page 56 relating to your electricity costs per
Bitcoin and the average breakeven Bitcoin price for the second quarter of 2023. We
reissue the comment in part and request that you include a more comprehensive breakeven
analysis for your Bitcoin mining operations that compares the cost to earn/mine one
Bitcoin with the market value of one Bitcoin.  Identify and explain all relevant inputs.
Quantitative tabular disclosure may be helpful.
6.You state on page 56 that "[i]n order to normalize the cost of electricity, [you] entered into
a Master Services Agreement with Atlas, pursuant to which [you] pay... a monthly fee to
Atlas for the quantity of electricity consumed by the miners at a rate of $0.08 per kWh."
Please address the following:
•Explain to us why you state on page 56 that "[y]our break-even power price is
$80/MW."  It appears that this is the contractually fixed rate for electricity that you
are charged, rather than a "breakeven" price.
•Explain to us why you state on page 56 that "the cost to earn a Bitcoin under the
Master Services Agreement is predominantly driven by the price of
power or electricity which fluctuates based on many factors, including the impacts of

 FirstName LastNameEdward Kovalik
 Comapany NamePrairie Operating Co.
 August 31, 2023 Page 3
 FirstName LastName
Edward Kovalik
Prairie Operating Co.
August 31, 2023
Page 3
weather and the price of natural gas."  If you pay a fixed rate per kWh pursuant to
the Master Services Agreement it would seem that weather or the price of natural gas
would not affect your price of electricity.
7.Please consider providing two separate discussions of factors affecting profitability,
one pre and one post the March 2, 2023 Master Services Agreement.  Currently, you
appear you discuss some profitability factors from before the Master Services Agreement
as if they still have the same impact.  For example you state on page 56 that "the cost of
natural gas that [you] use to produce electricity to power [y]our miners is volatile and has
increased substantially since the beginning of 2022."
            Please contact Jessica Livingston at 202-551-3448 or John Dana Brown at 202-551-3859
with any questions.
Sincerely,
Division of Corporation Finance
Office of Crypto Assets