SecProbe.io

CORRESP
1
filename1.htm

White
River Energy Corp

609
W/ Dickson St., Suite 102 G

Fayetteville,
AR 72701

August
22, 2023

VIA
EDGAR

Securities
and Exchange Commission

Division
of Corporation Finance

Office
of Energy & Transportation

    Re:
    White
    River Energy Corp

    Amendment
    No. 7 to Registration Statement on Form S-1

    Filed
    July 25, 2023

    File
    No. 333-268707

Ladies
and Gentlemen:

This
letter is submitted by White River Energy Corp (the “Company”) in response to the comment letter dated August 4, 2023 issued
by the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
with respect to the Company’s Amendment No. 7 to the Registration Statement on Form S-1 filed July 25, 2023. Amendment No. 8 is
being filed simultaneously. Except where otherwise indicated, capitalized terms used and undefined in this response letter have the meanings
given such terms in the Form S-1.

The
Prospectus has been updated as appropriate to give effect to changes affecting the Company and the industry in which it operates.

For
your convenience, each of the Staff’s comments have been restated below in their entirety, with the Company’s responses set
forth immediately beneath such comment.

Amendment
No. 7 to Registration Statement on Form S-1 filed July 25, 2023

Business

Key
Developments, page 51

1. We
                                            note that you expanded disclosure in response to prior comment 3 to discuss the uncertainty
                                            of collecting amounts due from Ault associated with certain participation rights although
                                            you have not explained why the amount would not be received under the arrangement with Ecoark
                                            that you previously disclosed on page 81 of the amendment that you filed on March 29, 2023,
                                            which has been removed in the more recent amendments, though continues to be described on
                                            page F-28, stating “The effect of this transaction for the Company is that we begin
                                            collecting Amounts from Ecoark in satisfaction of Ault’s account payable to us related
                                            to the Participation Rights due.”

Securities and Exchange Commission

August 22, 2023

Page 2

Please
further expand your disclosures on pages 51, 81, and F-28 to describe the status of the arrangement under which payments due from Ault
were to be paid by Ecoark instead and if you do not expect to receive the payment from either Ault or Ecoark, also describe the recoverability
assessments that you have performed in accounting for the $1.4 million receivable from Ault Energy pursuant to the policy that you describe
on page F-11. Please also file the agreement with Ecoark as an exhibit to your registration statement. Refer to Item 601(b)(10) of Regulation
S-K.

Response:
We have updated the disclosure on page 52, in the financial statements and elsewhere in the Registration Statement to address the arrangement
with Ecoark and Ault. We have also added a risk factor regarding the uncertainty surrounding our ability to collect the amounts due on
page 7.

As
it relates to the recoverability of the $1.4 million receivable from Ault as of March 31, 2023, the Company has collected $1.2 million
in April 2023 and concluded there is no recoverability issue with the receivable as of March 31, 2023. As it relates to the outstanding
amounts due from Ault, as of June 30, 2023 the entire balance under these participation agreements and another Ault receivable
has been fully reserved for as bad debt.

2. We
                                            note that you have added disclosure in response to prior comment 4 to describe various scenarios
                                            that may be available to investors in the Fund in connection with the redemption rights that
                                            you have conveyed with their interests in the fund, which you indicate may be exercised within
                                            90 days of the earlier of 42 months after the offering, and September 30, 2027, and cause
                                            you to pay fair value for the interests using a “PV20” valuation methodology.

You
indicate that as of July 24, 2023, the Fund has raised $3,250,000 and we see that you have reported the amount as a non-controlling interest
within equity on pages 28, 33, F-3, and F-5. However, given the redemption provision that you have described it is unclear why you would
not be reporting the balance as temporary equity, following the guidance in FASB ASC 480-10-S99-3A.

Please
also address applicability of the guidance referenced above, including paragraph 3 as to the intended scope, paragraph 4 on classification,
paragraph 12(c) on initial valuation, and paragraphs 15 and 16(c) on subsequent measurement, including the election that would be made
for instruments that are not currently redeemable. Please submit any revisions that you believe would be necessary to conform your presentation
and accounting to this guidance.

Response:
We recognize that the Staff relied upon disclosure in Amendment No. 7 about the three options that partners will have upon a redemption
event. As described below, the Limited Partnership version filed with that amendment dated July 12, 2023 had not been executed as required
by the Limited Partnership Agreement so the disclosure was mistaken. Following receipt of the comment letter, our counsel requested the
executed Limited Partnership Agreement and we learned of the error.

Securities and Exchange Commission

August 22, 2023

Page 3

We
are providing the Staff with a brief overview of the Fund’s governing documents containing the redemption provisions as in effect
from inception to date.

The
table below reflects all Limited Partnership Agreements, the respective dates and the redemption language, if any.

    Date

    Name

    Redemption
    Requirement

    August
    29, 2022

    Limited
    Partnership Agreement

    none

    October
    31, 2022

    Limited
    Partnership Agreement

    Required
    redemption with no partner elections

    July
    12, 2023

    Amended
    and Restated Limited Partnership Agreement

    Three
    partner elections

    August
    17, 2023

    Amended
    and Restated Limited Partnership Agreement

    Three
    partner elections

Both
the October 31st and August 17th versions are filed as Exhibits 10.32 and 10.33, respectively, to Amendment No.
8. As indicated above, the July 12, 2023 version was not effective since the two investor partners never signed it. Section 13.14 of
the October 31, 2022 version required a majority of outstanding units to approve. That majority is held by a $3 million investor who,
together with a $250,000 investor, executed the October 31, 2022 version. After it was discovered they never executed the July 12th
version, the Fund created the version that was executed on August 17, 2023 and dated as of August 15, 2023.

We
also attach a copy of the July 12, 2023 partially executed version of the Amended and Restated Agreement as Exhibit A to this response
letter. It was filed as Exhibit 10.32 to Amendment No. 7. As a result of the change effective as of August 17th, the Company
believes that for the periods ended March 31, 2023 and June 30, 2023 treatment as permanent equity was appropriate as described below;
going forward beginning with the three months ending September 30, 2023, the Company will treat it as temporary equity.

The
Company has determined that prior to the August 17th amendment, under ASC 480-10-25-4 the redemption would be required to
occur only upon the liquidation of the reporting entity, and therefore classification as permanent equity is appropriate for the periods
ended prior to August 17th. ASC 480-10-25-4 provides that a mandatorily redeemable financial instrument shall be classified
as a liability (i.e. outside of permanent equity) unless the redemption is required to occur only upon the liquidation or termination
of the reporting entity. We interpret this guidance to provide that if the redemption is required to occur only upon liquidation or termination,
permanent equity is the appropriate classification for the financial instrument at issue.

Securities and Exchange Commission

August 22, 2023

Page 4

In
the Fund’s case, the October 2022 Agreement provided for the redemption to coincide with the Fund’s liquidation or termination
because Section 10.05 of the October 31, 2022 Agreement, when read in conjunction with Sections 101(11) and 801(4) of the Delaware Revised
Uniform Limited Partnership Act (Del. Code Ann. tit. 6, §§ 17-101 et seq.), would result in the dissolution of the partnership
due to a lack of any limited partners following the redemption. Specifically, Section 10.05 of the October 31st version provided
that the Fund “shall” purchase the partnership units from the investor partners, and that such investor partners “shall”
sell their partnership units to the Fund, thereby imposing a legal obligation on each party to effect the redemption of the partnership
units. When this occurs, the Fund would only have one partner – the general partner, and no limited partners as all outstanding
limited partnership units would be redeemed. This would result in a liquidation or termination of the Fund because Section 101(11) of
the Delaware Limited Partnership Act requires that a limited partnership have at least two partners, at least one of which is a limited
partner. Further Section 801(4) of the Delaware Limited Partnership Act provides that a partnership is dissolved upon the limited partnership
ceasing to have any limited partners. Based on the above-referenced provisions and ASC 480-10-25-4, permanent equity was the appropriate
accounting classification for the periods ended March 31, 2023 and June 30, 2023, because the October 31st version governed
the Fund during those periods.

For
future reporting periods beginning September 30, 2023, the August 17th Agreement governs the Fund. As explained below, we
believe the accounting treatment as permanent equity during the prior reporting periods is proper but that going forward, the Company
will be required to treat the fund investments as temporary equity.

As
explained above, the redemption required by Section 10.05 of the October 31st Agreement was mandatory as to both the Fund
and the limited partners for the periods ended March 31, 2023 and June 30, 2023, and is required to occur only upon the liquidation
of the Fund, such that the classification of permanent equity for the non-controlling interests is appropriate, as well as the initial
value and subsequent value presented.

We
have reviewed in detail ASC 480-10-S99-3A as it relates to the intended scope, classification, initial valuation and subsequent measurement
as it relates to the $3,250,000 that the Company received from the Fund, which has been classified as non-controlling interests. As stated
throughout the Prospectus, prior to the August 17, 2023 amendment, the offer to redeem these investments was mandatory upon liquidation
of the Fund.

Effective
with the August 17th Agreement, we have concluded that the classification will shift from permanent equity to temporary equity
as the Company is now responsible for potentially redeeming the partnership interest in cash should the partners choose this option.
This would create a situation where the redemption is not solely within the control of the Company. This reclassification is to occur
with our financial statements for the period ending September 30, 2023.

Therefore,
it is the Company’s conclusion that the non-controlling interest related to the Fund be considered permanent equity rather than
temporary equity as of June 30, 2023 and March 31, 2023, and that as a result no changes to the classification are necessary.

Securities and Exchange Commission

August 22, 2023

Page 5

An
example of our anticipated disclosure commencing with the period ending September 30, 2023 is as follows:

Note
__: Redeemable Non-Controlling Interests

The
ownership interests held by our subsidiary, a limited partnership, controlled by the Company are classified as non-controlling interests.
These non-controlling interests consist of outside parties that have certain redemption rights that, if exercised, require the Company
to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling
interests and are reflected as temporary equity on the consolidated balance sheet and have been adjusted to their approximate redemption
values, after the attribution of net income or loss, pursuant to Paragraph 16C of ASC 480-10-S99-3A.

We
anticipate the reclassification to be made at the carrying amount pursuant to Paragraph 12C of ASC 480-10-S99-3A, and subsequently
adjusted to the PV20 valuation when the wells are brought online and this valuation can be measured pursuant to Paragraph
15 of ASC 480-10-S99-3A.

Financial
Statements

Report
of Independent Registered Public Accounting Firm, page F-1

3. Given
                                            the revisions made to Note 4 to your financial statements in response to prior comment 7,
                                            and considering the incremental changes that may be necessary to address the additional related
                                            comment in this letter, please discuss extending audit coverage to the incremental content
                                            for both periods with your auditors, and advise us of your arrangement with the auditors
                                            to address this concern, and the manner by which this will become apparent in the audit opinions.

Response:
MaloneBailey, LLP and RBSM LLP extended the audit coverage to “Oil and gas properties, full cost method” and “Unevaluated
wells in progress” in Note 4 to the financial statements for the years ended March 31, 2023 and 2022, and dual dated the audit
opinion to the financial statements for the years ended March 31, 2023 and 2022.

Securities and Exchange Commission

August 22, 2023

Page 6

Note
4 - Oil and Gas Properties, page F-18

4. We
                                            understand from your response to prior comment 6, including the roll-forward schedule that
                                            you included as Exhibit A, that you had recognized though did not disclose a ceiling test
                                            write-down during your fiscal year ended March 31, 2022.

Please
expand your disclosures on pages 23, F-10, and F-18, to identify this ceiling test charge, along with your disclosure of the more recent
write-down, and revise your disclosures within the MD&A Results of Operations - Costs and Expenses section on page 66, to include
a disaggregation of your depletion and ceiling test results for each period presented in the tabulation, and to discuss the reasons for
the period-to-period changes in depletion and write-downs, as you had explained in your response.

Please
also explain to us the basis on which you are presenting proved leasehold costs on pages F-18 and F-35 and the reasons these appear to
reflect some manner of net presentation relative to the details provided in Exhibit A to your prior response letter. Please also describe
the associated implications for your measurements of accumulated depletion and impairment, as presented in the filing, in comparison
to the details provided in Exhibit A.

Response:
We have expanded our disclosures on pages 24, F-10 and F-18 to identify which expenses relate to depletion, and those that relate
to impairment as