SecProbe.io

CORRESP
1
filename1.htm

Prairie
Operating Co.

55
Waugh Drive, Suite 400

Houston,
Texas 77007

November
22, 2024

Division
of Corporation Finance

Office
of Energy and Transportation

United
States Securities and Exchange Commission

Division
of Corporation Finance

100
F Street, N.E.

Washington,
D.C. 20549-3561

    Re:
    Prairie
    Operating Co.

    Registration
    Statement on Form S-3

    Filed October 18, 2024

    File No. 333-282730

Ladies
and Gentlemen:

Set
forth below are the responses of Prairie Operating Co. (the “Company,” “we,” “us”
or “our”) to comments received from the staff of the Division of Corporation Finance (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) by letter dated November 14, 2024, with respect
to the Company’s Registration Statement on Form S-3, File No. 333-282730, filed with the Commission on October 18, 2024 (the “Registration
Statement”).

For
your convenience, each response is prefaced by the exact text of the Staff’s corresponding comment in bold, italicized text.

Form
S-3 filed October 18, 2024

Registration
Rights Agreement, page 6

    1.
    We
    note that in connection with the Standby Equity Purchase Agreement (the “SEPA”), you entered into a registration rights
    agreement with YA II PN, LTD., pursuant to which you agreed to file a registration statement registering the resale of the common
    stock underlying the SEPA, a promissory note in the original principal amount of $15 million, and a commitment fee of 100,000 shares
    of common stock. Please revise your disclosure here and in the corresponding section of each resale prospectus to ensure such transactions
    are fully described and to disclose the total amount of shares that are subject to this registration rights agreement.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and we have revised the disclosure on page 6, page 10 and pages 10 and
    15 of each respective prospectus contained in Amendment No. 1 to the Registration Statement in response to the Staff’s comments.

Securities
and Exchange Commission

November
22, 2024

Page
2

Description
of Securities

Forum
Selection, page 8

    2.
    Your
    disclosure regarding your exclusive forum provision does not appear consistent with the provision included in your governing documents.
    In that regard, we note that Clause Thirteenth of your second amended and restated certificate of incorporation and Section 8.08
    of your amended and restated bylaws select “the Court of Chancery of the State of Delaware (or, if the Court of Chancery of
    the State of Delaware does not have jurisdiction, the Superior Court of the State of Delaware, or, if the Superior Court of the State
    of Delaware does not have jurisdiction, the United States District Court for the District of Delaware...” as the exclusive
    forum for certain actions and that the district courts of the United States will be the sole and exclusive forum for the resolution
    of any complaint asserting a cause of action arising under the Securities Act of 1933. In addition, disclose whether this provision
    applies to actions arising under the Securities Act or Exchange Act. In that regard, we note that Section 27 of the Exchange Act
    creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the
    rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts
    over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Please
    ensure corresponding disclosure is included in each resale prospectus.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and we have revised the disclosure on page 8, page 12, and page 12 of
    each prospectus contained in Amendment No. 1 to the Registration Statement in response to the Staff’s comments.

    Plan
    of Distribution, page 17

    3.
    You
    state on page 17 of the resale prospectus registering the offer and sale of up to 4,198,343 Shares of Common Stock that Regulation
    M “may apply to sales of securities in the market and to the activities of the Selling Stockholder and its affiliates.”
    Please revise to disclose how the provisions of Regulation M may prohibit YA II PN, LTD and any other distribution participants that
    are participating in the distribution of your securities from engaging in market making activities (e.g., placing bids or making
    purchases to stabilize the price of the ordinary shares) while the equity line is in effect; and purchasing shares in the open market
    while the equity line is in effect.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and we have revised the disclosure on page 17 of the resale prospectus
    registering the offer and sale of up to 4,198,343 Shares of Common Stock in Amendment No. 1 to the Registration Statement in
    response to the Staff’s comments.

Securities
                                            and Exchange Commission

November
22, 2024

Page
3

General

    4.
    It
    appears that the aggregate market value of your common equity held by non-affiliates during the 60 days prior to October 18, 2024
    did not exceed the $75 million threshold that General Instruction I.B.1 of Form S-3 specifies. Please provide us with your analysis
    demonstrating your ability to use Form S-3 pursuant to General Instruction I.B.1, or if you are relying on General Instruction I.B.6
    for Form S- 3 eligibility, include the information required pursuant to Instruction 7 to General Instruction I.B.6. Alternatively,
    please amend your registration statement on an appropriate form.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and advise the Staff that the aggregate market value of the outstanding voting
    and non-voting shares of the Company’s common stock held by non-affiliates during the 60 days prior to October 18, 2024
    exceeded the $75 million threshold that General Instruction I.B.1 of Form S-3 specifies. As reported in the Quarterly Report on Form
    10-Q of the Company filed on November 8, 2024 for the quarterly period ending September 30, 2024, 22,918,763 shares of common stock
    were outstanding as of November 7, 2024, the same number of shares of common stock outstanding as of October 18, 2024. To the
    knowledge of the Company, as of October 18, 2024 and November 8, 2024, affiliates of the Company, including directors, executive
    officers and 10% and greater beneficial owners of the Company’s common stock, held 14,812,437 shares of common stock,
    comprised of (i) 2,864,610 shares of common stock directly and indirectly held by directors and executive officers of the Company,
    (ii) 10,439,614 shares of common stock held by Narrogal Nominees Pty Ltd ATF Gregory K O’Neill Family Trust and (iii)
    1,508,213 shares of common stock directly and indirectly held by Paul Kessler, a former director of the Company. In accordance with
    Compliance and Disclosure Interpretation 116.06, the Company selected September 17, 2024, such date being 31 days prior to October
    18, 2024, as the date for determining the price of the common stock of the Company for calculating the aggregate market value of the
    voting and non-voting common equity held by non-affiliates of the Company under General Instruction I.B.1 of Form S-3. On September
    17, 2024, the Company’s common stock closed at a price of $11.87. Accordingly, the Company calculated the aggregate market
    value of its common equity held by non-affiliates in accordance with General Instruction I.B.1 of Form S-3 as follows:

    Shares Outstanding (October
    18, 2024)
      22,918,763

    Shares Issued and Beneficially
    Owned by Affiliates (October 18, 2024)
      14,812,437

    Shares Outstanding Held by Non-Affiliates
    (October 18, 2024)
      8,106,326

    Closing Price of Common
    Stock (September 17, 2024)
    $ 11.87

    Aggregate Market
    Value of Common Equity Held by Non-Affiliates
    $ 96,222,090

Securities
                                            and Exchange Commission

November
22, 2024

Page
4

    Since
    the Company satisfied the requirement specified in General Instruction I.B.1 of Form S-3 that the aggregate market value of its common
    equity held by non-affiliates be greater than $75 million as of a date within 60 days prior to the date of filing of the Registration
    Statement, we believe the Company is eligible to use Form S-3 for both primary and resale offerings.

    5.
    Please
    revise your explanatory note to clarify that the resale prospectus registering the offer and sale by certain selling stockholders
    of an aggregate of 2,968,592 shares of common stock includes 1,141,552 shares that are issuable upon exercise of warrants issued
    to investors in accordance with a subordinated promissory note entered into on September 30, 2024 and 1,827,040 shares issued to
    an investor pursuant to a securities purchase agreement dated September 30, 2024.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and we have revised the disclosure in the explanatory note of Amendment No. 1
    to the Registration Statement in response to the Staff’s comments.

    6.
    Please
    revise the explanatory note and the prospectus cover page for the resale prospectus registering the offer and sale of to 4,198,343
    shares of common stock by YA II PN, LTD., to clarify whether you are registering 100,000 commitment shares issued to YA. In that
    regard, we note your disclosure on page 14 under Selling Stockholder states that such 4,198,343 shares consist of (i) up to 100,000
    commitment shares that have been issued to YA for the commitment fee, and (ii) up to 4,098,343 shares of common stock (a) issuable
    to YA by the company under the SEPA, subject to the satisfaction of the conditions set forth in the SEPA, and (b) issuable to YA
    upon conversions of the Yorkville Note.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and we have revised the disclosure in the explanatory note and on the cover
    page of the resale prospectus with respect to the registration of 4,198,343 shares of common stock in Amendment No. 1 to the
    Registration Statement in response to the Staff’s comments.

    7.
    Please
    expand the disclosure in your resale prospectus with respect to the registration of 2,968,592 shares of common stock to describe
    the material terms of the warrants to purchase 1,141,552 shares, including the exercise price and the period of time during which
    such warrants are exercisable.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and we have revised the disclosure on the cover page of the resale prospectus
    with respect to the registration of 2,968,592 shares of common stock in Amendment No. 1 to the Registration Statement in response to
    the Staff’s comments.

Securities
                                            and Exchange Commission

November
22, 2024

Page
5

    8.
    Please
    expand the disclosure in your resale prospectus with respect to the registration of 4,198,343 shares of common stock to describe
    the material terms of the Yorkville Note, including the conversion price and any mechanics.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and we have revised the disclosure on the cover page of the resale prospectus
    with respect to the registration of 4,198,343 shares of common stock in Amendment No. 1 to the Registration Statement in response to
    the Staff’s comments.

    9.
    We
    note your disclosure in each resale prospectus under Plan of Distribution that your selling shareholders may sell their securities
    to or through underwriters and in any method permitted pursuant to applicable law. Please confirm your understanding that the retention
    by a selling shareholder of an underwriter would constitute a material change to your plan of distribution requiring a post-effective
    amendment. Refer to your undertaking provided pursuant to Item 512(a)(1)(iii) of Regulation S-K.

    RESPONSE:
    We respectfully acknowledge the Staff’s comment and confirm engaging an underwriter would be a material change requiring a
    post-effective amendment or inclusion in an incorporated report or form of prospectus filed pursuant to Rule 424(b).

*
     *      *      *      *

 In
addition, the Company would like to inform the Staff of its intention to file the unaudited pro forma condensed combined financial information
of the Company and Nickel Road Operating LLC (“NRO”), reflecting the acquisition of certain assets of NRO by the Company,
for the nine-month period ended September 30, 2024, and the year ended December 31, 2023, prior to submitting a request for effectiveness
with the Staff.  Please direct any questions that
you have with respect to the foregoing or if any additional supplemental information is required by the Staff, please contact T. Mark
Kelly of Vinson & Elkins L.L.P. at (713) 758-4592 or E. Ramey Layne of Vinson & Elkins L.L.P. at (713) 758-4629.

    Very
    truly yours,

    PRAIRIE
    OPERATING CO.

    By:
    /s/
    Edward Kovalik

    Name:
    Edward
    Kovalik

    Title:
    Chief
    Executive Officer

Enclosures

  cc:

  T.
Mark Kelly, Vinson & Elkins L.L.P.

  E.
Ramey Layne, Vinson & Elkins L.L.P.