PROP · Prairie Operating Co.

Prairie Operating Co. executed a letter agreement with Hudson Bay PH XIX LLC on April 8, 2026, facilitating the repurchase of 13,727 shares of Series F Convertible Preferred Stock for $18,999,047.64 in cash plus accrued dividends settled in common stock shares. This transaction reduces the company's outstanding preferred shares and associated dividend obligations. In exchange, the company issued the First Penny Warrant, immediately exercisable for 4 million common shares at a nominal $0.01 exercise price, providing High Trail with significant potential dilution exposure. A Second Penny Warrant for 3 million shares at the same price is contingent on the non-issuance of Anniversary Warrants by July 8, 2026. Both warrants terminate six months after all Series F Preferred shares are retired, conditional on shares being Freely Tradeable for the prior 90 days. The agreement also secures waiver of a $3.0 million extension fee, offering immediate cash preservation. Key amendments to the March 24, 2025 Securities Purchase Agreement defer the Anniversary Warrant issuance to July 8, 2026, and cut the share allocation from 125% to 75% of Stated Value, mitigating future dilution. Additional terms enhance High Trail's position with favorable Alternative Conversion Consideration calculations, adjusted Cash Sweep Amounts (50% of Cash Sweep Financing, 25% of DFCF Actions), registration rights mandating a resale S-1/S-3 filing within 30 days with liquidated damages for delays, and preemptive participation rights up to 35% in equity offerings for 18 months. Issued under Section 4(a)(2) exemption, these penny warrants represent material unregistered securities activity with high investor relevance due to dilution potential and capital structure changes.