What changed in this filing

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Item 1. Business

2023-03-31 compared with 2022-03-31 · 144 added, 168 removed, 80 unchanged (80% of the section changed)

3 unchanged sentences

Prior to cryptocurrency mining operations that began in October 2021, the Company produced live and virtual

pop culture conventions and events, and sold a gelatin machine and related consumables (known collectively as “legacy operations”).

All legacy operations were discontinued during 2021.

The Company operates an eCommerce site selling pop culture memorabilia and will

evaluate whether to continue the eCommerce operations in 2022.

pop culture conventions and events and sold a gelatin machine and related consumables that were discontinued in 2021.

In addition, the

Company operated an eCommerce site selling pop culture memorabilia that was discontinued on June 30, 2022 (known collectively as “legacy

operations”).

October 24, 2022, the Company, Creek Road Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company,

and Prairie Operating Co., LLC, a Delaware limited liability company (“Prairie”), entered into an Agreement and Plan of Merger

(the “Merger Agreement”), pursuant to which Merger Sub will merge with and into Prairie (the “Merger”), with

Prairie surviving and continuing to exist as a Delaware limited liability company and a wholly-owned subsidiary of the Company.

the effective time of the Merger (the “Effective Time”), the Company will (a) deliver the greater of (A) 2,000,000 shares

of its common stock, par value $0.0001 per share (“common stock”), and (B) the product of (x) the number of issued and outstanding

shares of common stock immediately following the consummation of the Restructuring Transactions (as defined below) by the Company multiplied

by (y) 33.33% to the members of Prairie (the “Prairie Members”) and (b) convert certain options to purchase membership interests

of Prairie into restricted performance-based options to purchase, in the aggregate, 8,000,000 shares of common stock for $0.25 per share

only exercisable if specific production hurdles are achieved.

connection with the Merger, the Company will cause the following restructuring transactions (the “Restructuring Transactions”):

(1) all holders of the Company’s outstanding shares of Series A preferred stock, Series B preferred stock, Series C preferred stock,

and 12% senior secured convertible debentures (the “Convertible Debentures”), and holders of certain warrants, certain convertible

promissory notes and certain other accrued liabilities, will convert their respective shares of Series A preferred stock, Series B preferred

stock, Series C preferred stock and Convertible Debentures, and respective warrants, convertible promissory notes and accrued liabilities

into shares of common stock and (2) thereafter, the Company shall effect a reverse stock split of the common stock at a ratio between

1-23 and 1-30 (the “Reverse Stock Split”).

Cryptocurrency

currently generate substantially all our revenue through cryptocurrency we earn through our mining activities, which we may strategically

hold or sell at beneficial prices and times.

We currently mine and hold Bitcoin exclusively and do not have the intention of mining any

other cryptocurrencies in the near future.

While we plan to hold our mined Bitcoin until the next halving event (expected to occur around

March 2024), we may sell the Bitcoin we mine as necessary for operations or as dictated by market conditions.

Our mining operations commenced

on October 24, 2021.

We use special cryptocurrency mining computers (known as “miners”) to solve complex cryptographic algorithms

to support the Bitcoin blockchain and, in return, receive Bitcoin as our reward.

Miners measure their processing power, which is known

as “hashing” power, in terms of the number of hashing algorithms solved (or “hashes”) per second, which is the

miner’s “hash rate.” We participate in Mining Pools (“mining pool”) that pool the resources of groups of

miners and split cryptocurrency rewards earned according to the “hashing” capacity each miner contributes to the mining pool.

of the miners we operate were manufactured by Bitmain, and incorporate application-specific integrated circuit (“ASIC”) chips

specialized to solve blocks on the Bitcoin blockchains using the 256-bit secure hashing algorithm (“SHA-256”) in return for

Bitcoin cryptocurrency rewards.

In October 2021 we put 156 Bitmain S19J Pro miners into production, and added another 84 into production

in December 2021.

As of December 31, 2021, we had 240 miners with 24 Ph/s of hashing capacity in production, and had deposits for an

additional 1,140 miners with 135.3 Ph/s hashing capacity to be delivered in 2022 as follows:

Bitmain S19 (90 Th/s per miner, total 24.3 Ph/s hashing capacity);

delivery expected March 2022

Bitmain S19J Pro (100 Th/s per miner, total 27 Ph/s hashing capacity);

delivery expected May 2022

Bitmain S19XP (140 Th/s per miner, total 84 Ph/s hashing capacity);

delivery expected July through December 2022

the delivery of the miners above we will have a total of 1,380 miners with 159.3 Ph/s of hashing capacity.

purchase commitments for the miners total approximately $11.5 million, of which $7,089,000 was paid as a deposit during the year ending

The remaining commitments of approximately $4.4 million are anticipated to be paid monthly from the proceeds of the

sale of earned Bitcoin during the year ending December 31, 2022 or, if necessary or advisable, with earned Bitcoin to the extent that

if the vendor accepts Bitcoin as a form of payment or from additional capital raising, which may be debt or equity, or a combination

thereof pursuant to a private or public offering, with the last payment scheduled to occur on November 10, 2022.

utilize mobile data centers to house our miners.

Our mobile data centers are located close to natural gas wellheads.

We use natural gas

to power a mobile turbine that produces electricity that, in turn, is used to power our miners.

generate substantially all our revenue through cryptocurrency we earn through our mining activities.

We have historically mined and held

Bitcoin exclusively, which we may sell to fund our operating and capital expenditures.

Our mining operations commenced on October 24,

We use special cryptocurrency mining computers (known as “miners”) to solve complex cryptographic algorithms to support

the Bitcoin blockchain and, in return, receive Bitcoin as our reward.

Miners measure their processing power, which is known as “hashing”

power, in terms of the number of hashing algorithms solved (or “hashes”) per second, which is the miner’s “hash

rate.” We participate in mining pools that pool the resources of groups of miners and split cryptocurrency rewards earned according

to the “hashing” capacity each miner contributes to the mining pool.

Since June 30,

2022 the Company is neither receiving meaningful cryptocurrency awards nor generating meaningful revenue from cryptocurrency mining.

of our miners were manufactured by Bitmain, and incorporate application-specific integrated circuit (“ASIC”) chips specialized

to solve blocks on the Bitcoin blockchains using the 256-bit secure hashing algorithm (“SHA-256”) in return for Bitcoin cryptocurrency

As of December 31, 2022, we had 510 Bitmain S19J Pro miners with 51.0 Ph/s of hashing capacity and 270 Bitmain S19 miners with

24.3 Ph/s of hashing capacity, none of which were in service.

December 17, 2021 the Company entered into a Non-Fixed Price Sales and Purchase Agreement (the “Bitmain Agreement”) with

Bitmain Technologies Limited (“Bitmain”) for 600 Bitmain S19XP miners with a reference price of approximately $11,250 per

The miners have a total of 84 Ph/s of hashing capacity and an initial estimated purchase commitment of $6,762,000 (the “total

reference price”), subject to price adjustments and related offsets, including potential adjustments related to the market price

As of December 31, 2022, the Company has made payments of $3,969,000 (classified as deposits on mining equipment) to Bitmain

pursuant to the Bitmain Agreement, and the remaining amount due under the Bitmain Agreement is $47,600 and presented in the table below:

July 2022 batch (100 miners)

August 2022 batch (100 miners)

September 2022 batch (100 miners)

October 2022 batch (100 miners)

November 2022 batch (100 miners)

December 2022 batch (100 miners)

Estimated total amount due

Payments made

Remaining amount due

of December 31, 2022, all 600 miners purchased from Bitmain have not been delivered to the Company, and will remain undelivered until

all fees are paid to ship the miners from the Bitmain facility to the Company.

Company measures its operations by the number and U.S.

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Quantity of Bitcoin

Balance September 30, 2021

Revenue recognized from cryptocurrency mined

Mining pool operating fees

Impairment of cryptocurrencies

Balance December 31, 2021

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Impairment of cryptocurrencies

Balance March 31, 2022

Revenue recognized from cryptocurrency mined

Mining pool operating fees

Proceeds from the sale of cryptocurrency

Realized loss on the sale of cryptocurrency

Impairment of cryptocurrencies

Balance June 30, 2022 (1)

Revenue recognized from cryptocurrency mined

Mining pool operating fees

Impairment of cryptocurrencies

Balance September 30, 2022 (1)

Revenue recognized from cryptocurrency mined

Mining pool operating fees

Proceeds from the sale of cryptocurrency

Realized gain on the sale of cryptocurrency

Balance December 31, 2022 (1)

June 30, 2022 the Company is neither receiving meaningful cryptocurrency awards nor generating

meaningful revenue from cryptocurrency mining.

Affecting Profitability

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At a predetermined block, the mining reward is cut in half,

hence the term “halving.” For Bitcoin the reward was initially set at 50 Bitcoin currency rewards per block.

hence the term “halving”.

For Bitcoin the reward was initially set at 50 Bitcoin currency rewards per block.

blockchain has undergone halving three times since its inception as follows:

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in prices in advance of, or following, a future halving is unknown.

we currently plan to hold our mined Bitcoin until the next halving event, we may use or sell our Bitcoin as necessary for operations

or as dictated by market conditions.

business environment is constantly evolving, and cryptocurrency miners can range from individuals to large-scale commercial mining operations.

We compete with other companies that focus all or a portion of their activities on mining activities at scale, including several public

and private companies.

We face significant competition in every aspect of our business, including, but not limited to, the acquisition

of mining equipment, the ability to raise capital, and the ability to obtain the lowest cost energy to power our mining operations.

have historically mined and held Bitcoin exclusively, which we may sell to fund our operating and capital expenditures.

June 30, 2022 the Company is neither receiving meaningful cryptocurrency awards nor generating meaningful revenue from cryptocurrency

business is heavily dependent on the market price of Bitcoin, which has experienced substantial volatility and has recently dropped to

its lowest price since December 2020.

As of December 31, 2022 the market price of Bitcoin was $16,547, which reflects a decrease of approximately

60% since the beginning of 2022, and of approximately 75% from its all-time high of approximately $67,000.

In addition, the cost of natural

gas that we use to produce electricity to power our miners has increased substantially.

The cost of natural gas in the United States

during 2022 has increased by as much as approximately 260% since the beginning of 2022.

These price movements result in decreased cryptocurrency

mining revenue and increased cryptocurrency mining costs, both of which have a material adverse effect on our business and financial

Cryptocurrency

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For additional discussion regarding our belief about the potential risks existing and future regulation pose to

our business, see the Section entitled “Risk Factors” herein.

our business, see the Section entitled “Risk Factors”.

do not currently own any patents in connection with our existing and planned blockchain and cryptocurrency related operations.

and Ability to Continue as a Going Concern

of December 31, 2021, we had cash and cash equivalents of $2,785,187, compared to $1,897,703 as of December 31, 2020, an increase of

This increase was primarily due to cash provided by financing activities, and partially offset by cash used in operating and

investing activities.

Historically,

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for the years ended December 2022 and 2021, respectively.

On December 31, 2021, we had cash and cash equivalents of approximately

$2.7 million and working capital of approximately $4.8 million.

We have evaluated the significance of these conditions in relation to

our ability to meet our obligations, which had previously raised doubts about the Company’s ability to continue as a going concern.

However, the Company believes that the effects of the sale of its legacy operations during 2021, and the entrance into cryptocurrency

mining operations that began in October 2021, will guide the Company in a positive direction as we continue to strive to attain profitability.

Additionally,

if necessary, management believes that both related parties (management and members of the Board of Directors of the Company) and potential

external sources of debt and/or equity financing may be obtained based on management’s history of being able to raise capital from

both internal and external sources.

However, although there have been recent external source financings, there is no absolute certainty

that any such external source or related party financing can be obtained in the future.

Therefore, the accompanying consolidated financial

statements have been prepared assuming that the Company will continue as a going concern.

consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification

of assets, or the amounts and classification of liabilities that may result from the matters discussed herein.

While the Company believes

in the viability of management’s strategy to obtain debt and/or equity financing, generate sufficient revenue, and control costs,

there can be no assurances to that effect.

The Company’s ability to continue as a going concern is dependent upon the ability to

obtain debt and/or equity financing, generate sufficient revenues, and to control operating expenses.

objective is to mine and hold select cryptocurrencies.

We seek to own multiple oil and natural gas producing assets, utilize the natural

gas to power environmentally-friendly, state of the art cryptocurrency mining facilities.

By directing income from oil and excess natural

gas sales to cover operating expenses we will have the opportunity to retain our mined cryptocurrencies as assets.

To achieve our objectives,

we have developed and are implementing a Five Cornerstone Strategy comprised of:

I – Vertical Integration

continuity through ownership of fuel supply, eliminate middlemen and distributors, generate electricity independent of a stressed power

grid and avoid any potential forthcoming governmental regulations.

We expect this will enable us to:

continuity and security – Control of our electrical generation insures and ensures uninterrupted service while insulating our

operations from third party controls, the regulated utility grid, and unforeseen failures.

profitability – Vertical integration, beginning at the well head and ending in our crypto wallet, eliminates middlemen and

distributors optimizing profits across the entire operation.

grid independence - Utility grids are struggling to deliver reliability as they attempt to balance base load with increasing numbers

of renewable generators.

We believe this will only get more difficult in the future as society undergoes the transition to “electrify

everything” thereby increasing grid instability, blackouts and disgruntled consumers.

By us not having any energy produced

touching infrastructure or the utility grid, this risk is muted.

regulatory buffers - The sector may experience increased governmental oversight and regulation of power producers that provide energy

to the grid, only exacerbating continuity problems.

By us not having any energy produced touching infrastructure or the utility grid,

this risk is muted.

control of its ESG Strategy – We believe that a vertical integration strategy enables us to have full control of our ESG strategy

(Described below).

II – Energy Source Diversity

development will be sized and engineered to work in harmony with the inherent diversity found within its owned oil and gas operating

Our modular approach to both power and server implementation allows a customized, fit-for-purpose design to be implemented

for each situation.

We expect this will enable us to:

the concentration risk of reliance on any single energy production source.

We would rather have 100 natural gas wells feeding five

20 MW systems as compared to siting a much larger single 100 MW system next to a substation that is sourced by a single hydro facility

or coal fired plant connected to the utility grid.

continuity of operations – maximize number of miners online 24/7.

Multiple energy sources mitigate interruption risk and if

problems do occur, the impact of any downtime is limited to a small percentage of operating miners.

III – Geographic Diversity

look to deploy facilities at geographically diverse locations that will mitigate concentration risk due to weather and market- related

disruptions, and minimize the impact of an ever changing regulatory and political complications.

We expect this will enable us to:

risks associated with interruptions and outages, whether due to weather, disasters, or lost connectivity.

differentials in energy pricing across geographic regions

IV – Cryptocurrency Diversity

utilizing remotely accessible UL certified data centers capable of handling AICS and GPUs, in the coming years we expect this will enable

nimble and a first mover in this ever changing and young cryptocurrency market

cryptocurrency volatility.

pivot to the most profitable currency.

V – Revenue Diversity

our vertical integration and potential ownership of oil and gas operations, we realize the benefit of having multiple non-correlated

revenue streams derived from both conventional oil and gas sales, as well as converting gas molecules into crypto currency via our digital

We expect this will enable us to:

all operating expenses utilizing revenue generated from other commodity sales.

treasury status of mined cryptocurrencies;

offering control over when to sell and hedge.

revenue risk across multiple commodities.

Environmental,

Social and Governance (“ESG”)

deploying our Five Cornerstone Strategy and achieving its objectives, we expect to have a constant focus on ESG.

Divided into three phases,

we have begun implanting Phase 1 and Phase II.

natural gas as opposed to coal assets.

data centers near natural gas production thereby reducing the energy required to transport molecules and electrons to cryptocurrency

data centers.

gas opportunities – locate mining facilities near these natural gas production sites.

energy (wind or solar) – identify geographical locations where renewable energy possibilities exist and can supplement the

natural gas requirements while generating renewable electricity credits.

capture / Carbon credits – possibility of creating carbon credits

with recycling efforts and use syngas (synthetic gas)

are subject to risks and uncertainties as a result of the COVID-19 pandemic.

The extent of the impact of the COVID-19 pandemic on our

business is highly uncertain and difficult to predict, as the responses that we, other businesses and governments are taking continue

Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is

possible that it could cause a local and/or global economic recession.

Policymakers around the globe have responded with fiscal policy

actions to support the healthcare industry and economy as a whole.

The magnitude and overall effectiveness of these actions remain uncertain.

severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the

duration and severity of the pandemic and the extent and severity of the impact on our customers, service providers and suppliers, all

of which are uncertain and cannot be predicted.

As of the date of issuance of our financial statements, the extent to which the COVID-19

pandemic may in the future materially impact our financial condition, liquidity or results of operations is uncertain.

We cannot predict if we will be profitable.

We may continue to incur losses

for an indeterminate period of time and may be unable to achieve profitability.

An extended period of losses and negative cash flow may

prevent us from successfully operating and expanding our business.

We may be unable to achieve or sustain profitability on a quarterly

or annual basis.

On December 31, 2022, we had cash and cash equivalents of $246,358, a working capital deficit of approximately $8.1

million, and an accumulated deficit of approximately $61 million.

have evaluated the significance of the uncertainty regarding the Company’s financial condition in relation to our ability to meet

our obligations, which has raised substantial doubts about the Company’s ability to continue as a going concern.

While it is very

difficult to estimate our future liquidity requirements the Company believes that if it is unable close the Merger, or obtain debt and/or

equity financing, existing cash resources will be depleted in early 2023.

The Company may be able to generate cash through the sale of

fixed assets, specifically cryptocurrency miners.

However, the total cash generated would be significantly less that the total of the

Company’s liabilities.

There are no assurances that the Merger will close, that debt and/or equity financing can be obtained, or

that the sale of fixed assets, specifically cryptocurrency miners can be achieved.

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

The consolidated

financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of

assets, or the amounts and classification of liabilities that may result from the matters discussed herein.

Company’s ability to continue as a going concern is dependent upon the Company’s ability to close the merger with Prairie,

or obtain debt and/or equity financing, and there are no assurances that either can occur.

of March 31, 2023, we had 2 full time employees.

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Prior to cryptocurrency mining operations that began in October 2021, the Company produced live and virtual

pop culture conventions and events, and sold a gelatin machine and related consumables (known collectively as “legacy operations”).

All legacy operations were discontinued during 2021.

The Company operates an eCommerce site selling pop culture memorabilia and will

evaluate whether to continue the eCommerce operations in 2022.

August 6, 2021, we entered into an Asset Purchase Agreement (the “Agreement”) with Informa Pop Culture Events, Inc., a Delaware

corporation (“Informa”).

Pursuant to the Agreement, Creek Road Miners Corp.

(fka Kick the Can Corp.) sold, transferred, and

assigned certain assets, properties, and rights to Informa related to the business of operating and producing live pop culture events.

The Company released deferred revenue and other liabilities totaling $722,429 and recognized other income of this amount.

pop culture conventions and events and sold a gelatin machine and related consumables that were discontinued in 2021.

In addition, the

Company operated an eCommerce site selling pop culture memorabilia that was discontinued on June 30, 2022 (known collectively as “legacy

operations”).

August 6, 2021, we entered into an Asset Purchase Agreement (the “Informa Agreement”) with Informa Pop Culture Events, Inc.,

a Delaware corporation (“Informa”).

Pursuant to the Informa Agreement, Creek Road Miners Corp.

(fka Kick the Can Corp.) sold,

transferred, and assigned certain assets, properties, and rights to Informa related to the business of operating and producing live pop

culture events.

The Company released deferred revenue and other liabilities totaling $722,429 and

recognized other income of this amount.

September 15, 2021, we sold our wholly owned subsidiary which contained our Jevo assets and all rights to our Jevo operations for $1,500,000

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the reduced number of shares, and the increase in the share price which resulted from this action.

October 24, 2022, the Company, Creek Road Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company,

and Prairie, entered into the Merger Agreement, pursuant to which Merger Sub will merge with and into Prairie, with Prairie surviving

and continuing to exist as a Delaware limited liability company and a wholly-owned subsidiary of the Company.

the Effective Time, the Company will (a) deliver the greater of (A) 2,000,000 shares of its common stock, par value $0.0001 per share

(“common stock”), and (B) the product of (x) the number of issued and outstanding shares of common stock immediately following

the consummation of the Restructuring Transactions (as defined below) by the Company multiplied by (y) 33.33% to the members of Prairie

(the “Prairie Members”) and (b) convert certain options to purchase membership interests of Prairie into restricted performance-based

options to purchase, in the aggregate, 8,000,000 shares of common stock for $0.25 per share only exercisable if specific production hurdles

are achieved.

connection with the Merger, the Company will cause the following restructuring transactions (the “Restructuring Transactions”):

(1) all holders of the Company’s outstanding shares of Series A preferred stock, Series B preferred stock, Series C preferred stock,

and 12% senior secured convertible debentures (the “Convertible Debentures”), and holders of certain warrants, certain convertible

promissory notes and certain other accrued liabilities, will convert their respective shares of Series A preferred stock, Series B preferred

stock, Series C preferred stock and Convertible Debentures, and respective warrants, convertible promissory notes and accrued liabilities

into shares of common stock and (2) thereafter, the Company shall effect a reverse stock split of the common stock at a ratio between

1-23 and 1-30 (the “Reverse Stock Split”).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business