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Get filing alertsPrairie Operating repurchases $19M preferred stock, issues 4M penny warrants to Hudson Bay
Filed April 9, 2026 · Period ending April 8, 2026 · ~1 min read
Key Changes
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high
Issued warrant for 4 million common shares at $0.01 exercise price to Hudson Bay, immediately exercisable. Additional 3M-share warrant may be issued if Anniversary Warrants aren't delivered by July 8. Represents significant dilution at nominal price.
Item 1.01 verify on EDGAR → -
high
Repurchased 13,727 shares of Series F Preferred Stock from Hudson Bay for $19M cash plus accrued dividends (paid in common stock). Reduces preferred obligations and dividend burden but depletes cash reserves.
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medium
Hudson Bay granted 35% participation rights on all equity offerings for next 18 months, allowing investor to maintain or increase ownership stake in future capital raises.
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medium
Hudson Bay waived $3M cash extension fee in exchange for the repurchase and warrant package, saving immediate cash outflow.
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medium
Anniversary Warrant terms amended: issuance delayed to July 8, 2026 and calculation reduced from 125% to 75% of Stated Value, lowering potential dilution.
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Summary
Prairie Operating restructured its financing arrangement with Hudson Bay, spending $19 million in cash to repurchase preferred stock while issuing penny warrants that could add 4-7 million common shares at virtually no cost to the investor. The company traded immediate cash and significant future dilution for relief from a $3 million extension fee and reduced Anniversary Warrant obligations.
Retail investors should understand this as a liquidity-driven transaction. Prairie Operating eliminated high-cost preferred stock but granted Hudson Bay cheap equity upside and control over future fundraising through 35% participation rights. The penny warrants are immediately exercisable and represent substantial dilution—if exercised today, they'd increase the share count materially at just pennies per share.
Watch the July 8 deadline: if Prairie Operating doesn't issue the Anniversary Warrants by then, Hudson Bay gets another 3 million penny warrants. Also monitor whether Hudson Bay exercises its warrants quickly, which would signal the investor's view on near-term stock performance and add selling pressure.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
subject to High Trail’s receipt of the Repurchase Price, the issuance of the First Penny Warrant to High Trail, and certain other conditions set forth in the Letter Agreement, High Trail would waive the Company’s obligation to pay the previously announced $3.0 million cash extension fee
Hudson Bay agreed to waive a previously announced $3 million cash extension fee in exchange for the repurchase and warrant issuance. This saves Prairie Operating $3 million in immediate cash outflow, though the company still paid approximately $19 million for the preferred stock repurchase.
Event · Item 3.02 — Unregistered Sales of Equity Securities
Prairie Operating issued an unregistered equity warrant (First Penny Warrant) under Section 4(a)(2) and Regulation D exemption.
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The First Penny Warrant was issued without registration under the Securities Act, in reliance upon the exemption provided under Section 4(a) (2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.
The company issued a warrant called the First Penny Warrant in a private placement without SEC registration. The issuance relied on exemptions for private offerings to accredited investors under federal securities law. Details about the warrant terms are referenced in Item 1.01 of this filing but not included in the provided excerpt.
Event · Item 3.03 — Material Modification to Rights of Security Holders
Prairie Operating Co. disclosed a material modification to rights of security holders, with details incorporated by reference from Item 1.01.
Added in current filing · verify on EDGAR →
Material Modification to Rights of Security Holders. The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.
The company disclosed a material modification to the rights of its security holders under Item 3.03. The specific details of this modification are referenced in Item 1.01 of the same 8-K filing, which is not included in the provided text. Material modifications can include changes to voting rights, dividend rights, liquidation preferences, or other fundamental shareholder protections.
Event · Item 9.01 — Financial Statements and Exhibits
Prairie Operating issued penny warrants and entered a letter agreement with Hudson Bay PH XIX LLC on April 8, 2026.
Added in current filing · verify on EDGAR →
First Penny Warrant.
The company issued a First Penny Warrant, which is a warrant exercisable at a very low strike price (typically $0.01). Penny warrants are often used in financing arrangements and can result in significant dilution to existing shareholders when exercised.
Added in current filing · verify on EDGAR →
Form of Second Penny Warrant.
The company also issued a second form of penny warrant, indicating multiple tranches or types of warrants were granted. The combination of multiple penny warrant issuances suggests a substantial financing transaction that could materially dilute shareholder equity.
Added in current filing · verify on EDGAR →
Letter Agreement, dated April 8, 2026, by and between the Company and Hudson Bay PH XIX LLC.
Prairie Operating entered into a letter agreement with Hudson Bay PH XIX LLC, a known institutional investor that frequently provides financing to small-cap companies. The agreement likely governs the terms of the penny warrant issuance and any associated financing arrangement.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 8, 2026 · How we verify