Prairie Operating Co. New Standards Disclosure

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023–09, Income Taxes (Topic 740) (“ASC 740”): Improvements to Income Tax Disclosures (“ASU 2023–09”) to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023–09 is effective for annual periods beginning January 1, 2025, with early adoption permitted. The Company has adopted ASU 2023–09 for the annual period ended December 31, 2025 and has conformed its income tax disclosures in Note 18 – Income Taxes to reflect the new requirements.

In November 2024, the FASB issued ASU 2024–03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220–40): Disaggregation of Income Statement Expenses (“ASU 2024–03”), which requires the disclosure of specific information about certain costs and expenses. ASU 2024–03 is effective for annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures.

Recently Issued Tax Legislation

On July 4, 2025, Public Law 119–21, commonly referred to as One Big Beautiful Bill Act (“OBBB”) was signed into law, resulting in several changes to the U.S. federal income tax laws. The legislation includes several changes to federal tax regulations and makes permanent, extends, or modifies certain provisions of Public Law No. 115–97, commonly referred to as the Tax Cuts and Jobs Act. These changes include, among others, permanently restoring earnings before interest, taxes, depreciation, and amortization expense–based business interest deduction limitation, 100% bonus depreciation for certain property and immediate expensing for certain domestic research and experimental expenditures. The Company does not expect the OBBB to have a material effect on income tax expense for the year ending December 31, 2025. All effects of changes in tax legislation are recognized in the consolidated financial statements during the period of enactment. As such, the effects of the OBBB are reflected in the Company’s assessment of its valuation allowance as of December 31, 2025.