UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2021~~2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38003

RAMACO RESOURCES, INC.

(Exact name of registrant as specified in its charter)


Delaware	38-4018838
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

250 West Main Street, Suite 1800
Lexington, Kentucky	40507
(Address of principal executive offices)	(Zip code)

(859) 244-7455
(Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	METC	NASDAQ Global Select Market
9.00% Senior Notes due 2026	METCL	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐☒
Non-accelerated filer	☒☐	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November ~~1, 2021,~~7, 2022, the registrant had ~~44,109,366~~44,121,702 shares of common stock outstanding.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this ~~Quarterly Report,~~report, regarding our strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under, but not limited to, the heading “Item 1A. Risk Factors” included in this Quarterly Report and elsewhere in the Annual Report of Ramaco Resources, Inc. (the “Company”) on Form 10-K for the year ended December 31, ~~2020~~2021 (the “Annual Report”) filed with the United States Securities and Exchange Commission (the “SEC”) on ~~February 18, 2021~~April 1, 2022 and other filings of the Company with the SEC.

Forward-looking statements may include statements about:

●

risks related to the impact of the ~~COVID-19~~novel coronavirus “COVID-19” global pandemic, such as the scope and duration of the outbreak, the health and safety of our employees, government actions and restrictive measures implemented in response, delays and cancellations of customer sales, supply chain disruptions and other impacts to the business, or our ability to execute our business continuity plans;

●

anticipated production levels, costs, sales volumes and revenue;

●

timing and ability to complete major capital projects;

●

economic conditions in the metallurgical coal and steel industries generally, including any near-term or long-term downturn in these industries as a result of the COVID-19 global pandemic and related actions;

●

expected costs to develop planned and future mining operations, including the costs to construct necessary processing, refuse disposal and transport facilities;

●

estimated quantities or quality of our metallurgical coal reserves;

●

our ability to obtain additional financing on favorable terms, if required, to complete the acquisition of additional metallurgical coal reserves as currently contemplated or to fund the operations and growth of our business;

●

maintenance, operating or other expenses or changes in the timing thereof;

●

the financial condition and liquidity of our customers;

●

competition in coal markets;

●

the price of metallurgical coal or thermal coal;

●

compliance with stringent domestic and foreign laws and regulations, including environmental, climate change and health and safety regulations, and permitting requirements, as well as changes in the regulatory environment, the adoption of new or revised laws, regulations and permitting requirements;

●

potential legal proceedings and regulatory inquiries against us;

●

the impact of weather and natural disasters on demand, production and transportation;

●

purchases by major customers and our ability to renew sales contracts;

●

credit and performance risks associated with customers, suppliers, contract miners, co-shippers and traders, banks and other financial counterparties;

●

geologic, equipment, permitting, site access and operational risks and new technologies related to mining;

●

transportation availability, performance and costs;

●

availability, timing of delivery and costs of key supplies, capital equipment or commodities such as diesel fuel, steel, explosives and tires;

●

timely review and approval of permits, permit renewals, extensions and amendments by regulatory authorities;

●

our ability to comply with certain debt covenants;

●

tax payments to be paid for the current fiscal year;

●

our expectations relating to dividend payments and our ability to make such ~~payments, if any;~~payments;

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●

the anticipated ~~completion~~benefits and impacts of the ~~Acquisition (as defined below)~~Ramaco Coal, LLC (“Ramaco Coal”) and ~~the timing thereof ;~~Maben acquisitions;

●

risks related to Russia’s recent invasion of Ukraine and the ~~expected benefits of the Acquisition to the Company’s shareholders;~~international community’s response;

●

~~the anticipated benefits~~risks related to weakened global economic conditions and ~~impacts of the Acquisition;~~inflation; and

●

other risks identified in this Quarterly Report that are not historical.

We caution you that these forward-looking statements are subject to a number of risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control, incident to the development, production, gathering and sale of coal. Moreover, we operate in a very competitive and rapidly changing environment and additional risks may arise from time to time. It is not possible for our management to predict all of the risks associated with our business, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Quarterly Report are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement and speak only as of the date of this Quarterly Report. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Ramaco Resources, Inc.

Unaudited Condensed Consolidated Balance Sheets


In thousands, except share and per-share amounts	September 30, 2021		December 31, 2020

In thousands, except share and per share information					September 30, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	46,672	$	5,300	$	46,608	$	21,891
Accounts receivable		37,592		20,299		50,358		44,453
Inventories		13,880		11,947		40,028		15,791
Prepaid expenses and other		4,339		4,953		4,962		4,626
Total current assets		102,483		42,499		141,956		86,761
Property, plant and equipment, net		181,675		180,455		403,130		227,077
Financing lease right-of-use assets, net		8,897		—		9,839		9,128
Advanced coal royalties		5,509		4,784		3,618		5,576
Other		520		885		3,589		491
Total Assets	$	299,084	$	228,623	$	562,132	$	329,033

Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable	$	21,157	$	11,742	$	30,130	$	15,346
Accrued expenses		14,081		11,591		49,209		19,410
Asset retirement obligations		1,161		46		484		489
Current portion of long-term debt		5,781		4,872		30,839		7,674
Current portion of related party debt						35,000		—
Current portion of financing lease obligations		3,057		—		4,776		3,461
Other current liabilities		44		862		—		280
Total current liabilities		45,281		29,113		150,438		46,660
Asset retirement obligations		14,629		15,110		28,339		22,060
Long-term debt, net		2,809		12,578		16,838		3,339
Long-term related party debt						10,000		—
Long-term financing lease obligations, net		4,847		—		3,783		4,599
Senior notes, net		32,245		—		32,712		32,363
Deferred tax liability, net		3,412		1,762		17,985		6,406
Other long-term liabilities		2,054		965		3,368		2,532
Total liabilities		105,277		59,528		263,463		117,959

Commitments and contingencies		—		—		—		—

Stockholders' Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding		—		—		—		—
Common stock, $0.01 par value, 260,000,000 shares authorized, 44,109,366 at September 30, 2021 and 42,706,908 at December 31, 2020 shares issued and outstanding		441		427
Common stock, $0.01 par value, 260,000,000 shares authorized, 44,121,702 at September 30, 2022 and 44,092,981 at December 31, 2021 shares issued and outstanding						441		441
Additional paid-in capital		162,437		158,859		166,994		163,566
Retained earnings		30,929		9,809		131,234		47,067
Total stockholders' equity		193,807		169,095		298,669		211,074
Total Liabilities and Stockholders' Equity	$	299,084	$	228,623	$	562,132	$	329,033

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Ramaco Resources, Inc.

Unaudited Condensed Consolidated Statements of Operations


	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
In thousands, except per-share amounts	2021		2020		2021		2020		2022		2021		2022		2021

Revenue	$	76,377	$	39,459	$	195,889	$	117,769	$	136,925	$	76,377	$	430,461	$	195,889

Costs and expenses
Cost of sales (exclusive of items shown separately below)		54,808		35,689		143,768		96,758		79,634		54,808		237,530		143,768
Asset retirement obligations accretion		156		128		461		428		495		156		1,485		461
Depreciation and amortization		6,751		5,258		18,861		15,601		11,435		6,751		29,898		18,861
Selling, general and administrative		5,895		5,966		15,767		15,723		8,672		5,895		29,282		15,767
Total costs and expenses		67,610		47,041		178,857		128,510		100,236		67,610		298,195		178,857

Operating income (loss)		8,767		(7,582)		17,032		(10,741)
Operating income										36,689		8,767		132,266		17,032

Other income		789		1,743		7,156		11,456
Other income (expense), net										(933)		789		1,781		7,156
Interest expense, net		(933)		(344)		(1,418)		(915)		(2,255)		(933)		(5,323)		(1,418)
Income (loss) before tax		8,623		(6,183)		22,770		(200)
Income tax expense (benefit)		1,588		(1,407)		1,650		(38)
Net income (loss)	$	7,035	$	(4,776)	$	21,120	$	(162)

Earnings (loss) per common share
Income before tax										33,501		8,623		128,724		22,770
Income tax expense										6,596		1,588		27,068		1,650
Net income									$	26,905	$	7,035	$	101,656	$	21,120

Earnings per common share
Basic	$	0.16	$	(0.11)	$	0.48	$	—	$	0.61	$	0.16	$	2.30	$	0.48
Diluted	$	0.16	$	(0.11)	$	0.48	$	—	$	0.60	$	0.16	$	2.27	$	0.48

Basic weighted average shares outstanding		44,109		42,647		43,915		42,373		44,085		44,109		44,179		43,915
Diluted weighted average shares outstanding		44,465		42,647		43,996		42,373		44,543		44,465		44,747		43,996

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Ramaco Resources, Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

Additional

Total

Common

Paid-

Retained

Stockholders'
In thousands

Stock

in Capital

Earnings

Equity
Balance at January 1, 2021

$
427

$
158,859

$
9,809

$
169,095
Stock-based compensation

15

1,040

—

1,055
Net income

—

—

4,143

4,143
Balance at March 31, 2021

442

159,899

13,952

174,293
Restricted stock surrendered for withholding taxes payable

(1)

(326)

—

(327)
Stock-based compensation

—

1,522

—

1,522
Net income

—

—

9,942

9,942
Balance at June 30, 2021

441

161,095

23,894

185,430
Stock-based compensation

—

1,342

—

1,342
Net income

—

—

7,035

7,035
Balance at September 30, 2021

$
441

$
162,437

$
30,929

$
193,807

Balance at January 1, 2020

$
410

$
154,957

$
14,716

$
170,083
Stock-based compensation

17

906

—

923
Net income

—

—

1,962

1,962
Balance at March 31, 2020

427

155,863

16,678

172,968
Restricted stock surrendered for withholding taxes payable

(1)

(192)

—

(193)
Stock-based compensation

—

1,106

—

1,106
Net income

—

—

2,652

2,652
Balance at June 30, 2020

426

156,777

19,330

176,533
Stock-based compensation

1

1,089

—

1,090
Net loss

—

—

(4,776)

(4,776)
Balance at September 30, 2020

$
427

$
157,866

$
14,554

$
172,847


			Additional				Total
	Common		Paid-		Retained		Stockholders'
In thousands	Stock		in Capital		Earnings		Equity
Balance at January 1, 2022	$	441	$	163,566	$	47,067	$	211,074
Stock-based compensation		2		1,885		—		1,887
Dividends declared		—		—		(2,497)		(2,497)
Net income		—		—		41,471		41,471
Balance at March 31, 2022		443		165,451		86,041		251,935
Restricted stock surrendered for withholding taxes payable		(2)		(2,819)		—		(2,821)
Stock-based compensation		—		2,286		—		2,286
Dividends declared		—		—		(4,998)		(4,998)
Net income		—		—		33,280		33,280
Balance at June 30, 2022		441		164,918		114,323		279,682
Stock-based compensation		—		2,019		—		2,019
Stock options exercised		—		107		—		107
Shares surrendered for withholding taxes payable		—		(50)		—		(50)
Dividends declared		—		—		(9,994)		(9,994)
Net income		—		—		26,905		26,905
Balance at September 30, 2022	$	441	$	166,994	$	131,234	$	298,669


Balance at January 1, 2021	$	427	$	158,859	$	9,809	$	169,095
Stock-based compensation		15		1,040		—		1,055
Net income		—		—		4,143		4,143
Balance at March 31, 2021		442		159,899		13,952		174,293
Restricted stock surrendered for withholding taxes payable		(1)		(326)		—		(327)
Stock-based compensation		—		1,522		—		1,522
Net income		—		—		9,942		9,942
Balance at June 30, 2021		441		161,095		23,894		185,430
Stock-based compensation		—		1,342		—		1,342
Net income		—		—		7,035		7,035
Balance at September 30, 2021	$	441	$	162,437	$	30,929	$	193,807

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Ramaco Resources, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

Nine months ended September 30,

In thousands

2021

2020

Cash flows from operating activities:





Net income (loss)

$
21,120

$
(162)

Adjustments to reconcile net income (loss) to net cash from operating activities:

Accretion of asset retirement obligations

461

428

Depreciation and amortization

18,861

15,601

Amortization of debt issuance costs

96

43

Stock-based compensation

3,919

3,119

Other income - employee retention tax credit

(5,407)

—

Other income - PPP Loan

—

(8,444)

Deferred income taxes

1,650

(37)

Changes in operating assets and liabilities:

Accounts receivable

(17,293)

(2,030)

Prepaid expenses and other current assets

5,611

630

Inventories

(1,933)

(8,027)

Other assets and liabilities

760

(1,154)

Accounts payable

7,515

3,409

Accrued expenses

2,397

(2,429)

Net cash from operating activities

37,757

947

Cash flow from investing activities:

Purchases of property, plant and equipment

(17,642)

(20,515)

Net cash from investing activities

(17,642)

(20,515)

Cash flows from financing activities:

Proceeds from PPP Loan

—

8,444

Proceeds from borrowings

50,545

45,543

Payments of debt issuance cost

(2,356)

—

Repayment of borrowings

(24,900)

(32,597)

Repayments of financed insurance payable

(862)

(656)

Repayments of financing leased equipment

(1,253)

—

Restricted stock surrendered for withholding taxes payable

(327)

(193)

Net cash from financing activities

20,847

20,541

Net change in cash and cash equivalents and restricted cash

40,962

973

Cash and cash equivalents and restricted cash, beginning of period

6,710

6,865

Cash and cash equivalents and restricted cash, end of period

$
47,672

$
7,838

Supplemental cash flow information:

Cash paid for interest

$
852

$
820

Cash paid for taxes

—

—

Non-cash investing and financing activities:

Leased assets obtained under new financing leases

9,157

—

Capital expenditures included in accounts payable and accrued expenses

3,128

633

Additional asset retirement obligations incurred

235

172


	Nine months ended September 30,
In thousands	2022		2021
Cash flows from operating activities:
Net income	$	101,656	$	21,120
Adjustments to reconcile net income to net cash from operating activities:
Accretion of asset retirement obligations		1,485		461
Depreciation and amortization		29,898		18,861
Amortization of debt issuance costs		367		96
Stock-based compensation		6,192		3,919
Other income - gain on sale of mineral rights		(2,113)		—
Other income - employee retention tax credit		—		(5,407)
Deferred income taxes		11,579		1,650
Changes in operating assets and liabilities:
Accounts receivable		(5,905)		(17,293)
Prepaid expenses and other current assets		1,242		5,611
Inventories		(24,237)		(1,933)
Other assets and liabilities		91		760
Accounts payable		12,432		7,515
Accrued expenses		26,112		2,397
Net cash from operating activities		158,799		37,757

Cash flow from investing activities:
Capital expenditures		(91,384)		(17,642)
Acquisition of Ramaco Coal assets		(11,738)		—
Acquisition of Maben assets		(10,715)		—
Proceeds from sale of mineral rights		2,000		—
Net cash from investing activities		(111,837)		(17,642)

Cash flows from financing activities:
Proceeds from borrowings		17,000		50,545
Proceeds from stock option exercises		107		—
Payments of debt issuance cost		—		(2,356)
Payment of dividends		(14,996)		—
Repayment of borrowings		(17,066)		(24,900)
Repayments of financed insurance payable		(280)		(862)
Repayments of financing leased equipment		(3,760)		(1,253)
Restricted stock surrendered for withholding taxes payable		(2,871)		(327)
Net cash from financing activities		(21,866)		20,847

Net change in cash and cash equivalents and restricted cash		25,096		40,962
Cash and cash equivalents and restricted cash, beginning of period		22,806		6,710
Cash and cash equivalents and restricted cash, end of period	$	47,902	$	47,672

Supplemental cash flow information:
Cash paid for interest	$	4,680	$	852
Cash paid for taxes		15,500		—
Non-cash investing and financing activities:
Leased assets obtained under new financing leases		4,259		9,157
Financed equipment purchases		5,730		—
Capital expenditures included in accounts payable and accrued expenses		9,004		3,128
Ramaco Coal acquisition		56,551		—
Maben Coal acquisition		21,000		—
Additional asset retirement obligations incurred		4,682		235
Accrued dividends payable		4,994		—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Ramaco Resources, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1—BUSINESS

Ramaco Resources, Inc. (the “Company,” “we,” “us” or “our,”) is a Delaware corporation formed in October 2016. Our principal corporate and executive offices are located in Lexington, ~~Kentucky.~~Kentucky with operational offices in Charleston, West Virginia and Sheridan, Wyoming. We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania.

COVID-19 Pandemic—~~The global spread of~~ COVID-19 ~~created significant volatility, uncertainty~~continues to impact countries across the world, and ~~economic disruption during 2020. The Company was adversely affected by~~ the ~~deterioration~~duration and ~~increased uncertainty in the macroeconomic outlook as a result~~severity of the impact of COVID-19. After the initial outbreak, we observed a declining demand for, and declines in the spot price of, metallurgical coal as business and consumer activity decelerated across the globe. Throughout 2021, weeffects are seeing increases in demand from our primary customers, as the global economic recovery began. U.S. steel prices also have increased significantly due to this recovery and the effects from large-scale government stimulus measures.

currently unknown. We continue to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, suppliers, and stakeholders, or as required by federal, state, or local authorities.

Russian/Ukraine Conflict—The extent and duration of the military conflict involving Russia and Ukraine, resulting sanctions and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region. Globally, various governments have banned imports from Russia including commodities such as oil, natural gas and coal. These events have caused volatility in the commodity markets. This volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel products, may have a significant effect on market prices and overall demand for our coal and the cost of supplies and equipment. We are closely monitoring the potential effects on the market.

We have no meaningful direct financial exposure to Russia and Ukraine; however, the European Union ban on Russian coal has put upward pressure on international thermal coal prices. In addition, fear of economic contraction may affect future demand for coking coal. Recently, values of certain indices for high quality thermal coal have exceeded values of coking coal indices. If these conditions persist, available coking coal may be directed into thermal markets.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation—These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual ~~Report.~~Report on Form 10-K for the year ended December 31, 2021.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. Intercompany balances and transactions between consolidated entities have been eliminated.

Cash and Cash Equivalents—We classify all ~~highly-liquid~~highly liquid instruments with an original maturity of three months or less to be cash equivalents. Restricted cash balances were ~~$1.0~~$1.3 million at September 30, ~~2021~~2022 and ~~$1.4~~$0.9 million at December 31, ~~2020.~~2021. These consisted of funds held in escrow for potential future workers’ compensation claims and were classified in other current assets in the consolidated balance sheets.

Self-Insurance—We are self-insured for certain losses relating to workers’ compensation claims, including pneumoconiosis (occupational disease) claims. We purchase insurance coverage to reduce our exposure to significant levels of these claims. Self-insured losses are accrued based upon estimates of the aggregate liability for uninsured claims incurred as of the balance sheet date using current and historical claims experience and certain actuarial

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assumptions. At September 30, ~~2021,~~2022, the estimated aggregate liability for uninsured claims totaled ~~$3.5~~$4.2 million. Of this, ~~$2.1~~$2.7 million is included in other long-term liabilities within the consolidated balance ~~sheets.~~sheet at September 30, 2022. At December 31, ~~2020,~~2021, the estimated aggregate liability for uninsured claims totaled ~~$1.7~~$3.9 million including ~~$0.9~~$2.4 million included in other long-term liabilities. These estimates are subject to uncertainty due to a variety of factors, including extended lag times in the reporting and resolution of claims, and trends or changes in claim settlement patterns, insurance industry practices and legal interpretations. As a result, actual costs could differ significantly from the estimated amounts. Adjustments to estimated liabilities are recorded in the period in which the change in estimate occurs.

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Financial Instruments—Our financial assets and liabilities consist of cash, accounts receivable, accounts payable and indebtedness. The fair values of these instruments approximate their carrying amounts at each reporting ~~date.~~date, except that our Senior Notes have an estimated fair value of approximately $1.0 million higher than the balance recorded as of September 30, 2022.

Nonrecurring fair value measurements include asset retirement obligations, the estimated fair value of which is calculated as the present value of estimated cash flows related to its reclamation liabilities using Level 3 inputs. The significant inputs used to calculate such liabilities include estimates of costs to be incurred, our credit adjusted discount rate, inflation rates and estimated date of reclamation.

Concentrations—During the three months ended September 30, 2022, sales to our top four customers accounted for approximately 19%, 13%, 12% and 12% of our total revenue, respectively, aggregating to approximately 56% of our total revenue. The balance due from these four customers at September 30, 2022 was approximately 44% of total accounts receivable. During the nine months ended September 30, 2022, sales to our top two customers accounted for approximately 23% and 17% of our total revenue, respectively, aggregating to approximately 40% of our total revenue. During the three months ended September 30, 2021, sales to our top three customers accounted for approximately ~~29%, 19% and 16% of our total revenue, respectively, aggregating to approximately~~ 64% of ~~our~~ total revenue. ~~The balances due in the aggregate from these three customers at September 30, 2021 was approximately 63% of our total accounts receivable.~~ During the nine months ended September 30, 2021, sales to our top three customers accounted for approximately ~~31%, 18% and 10% of our total revenue, respectively, aggregating to approximately~~ 59% of our total revenue. The balances due in the aggregate from these three customers at September 30, 2021 was approximately 63% of our total accounts receivable. During the three months ended September 30, 2020, sales to our top three customers accounted for approximately 86% of total revenue. During the nine months ended September 30, 2020, sales to our top three customers accounted for approximately 71% of total revenue.

~~Recent~~Adoption of New Accounting ~~Pronouncements~~Standards—

In December 2019, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standards Update (“ASU”) 2019-12, Income Taxes, which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The standard was effective for us in the first quarter of our fiscal year 2021. The adoption of this ASU did not have a material impact on our consolidated financial statements.

Recent Accounting Pronouncements Being Assessed

In March 2020, the FASB issued ASU ~~No.~~ 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,, which ~~provides~~became effective immediately.The amendments in ASU 2020-04 provide optional ~~expedients and exceptions for applying generally accepted~~relief regarding the accounting ~~principles to contracts, hedging relationships, and other transactions affected by~~effects of reference rate reform, ~~if certain criteria~~including various types of contract modifications (e.g., debt) as well as hedging relationships. Overall, the guidance permits financial reporting that generally reflects the intended continuation of contracts that reference rates, such as the London Interbank Offered Rate (“LIBOR”), that are ~~met. The amendments are effective for all entities beginning on March 12, 2020 through December 31, 2022.~~expected to be discontinued as a result of reference rate reform initiatives. The Company has ~~not adopted this ASU. The Company~~an outstanding term loan that references LIBOR; however, the debt is ~~currently assessing~~expected to be repaid in the ~~impact of adopting this standard on its consolidated financial statements~~near term and, ~~the timing of adoption.~~

~~NOTE 3—PROPERTY, PLANT AND EQUIPMENT~~

~~Property, plant and equipment consisted of the following:~~

(In thousands)

September 30, 2021

December 31, 2020

Plant and equipment

$
161,566

$
155,173

Construction in process

4,890

7,245

Capitalized mine development costs

88,713

74,279

Less: accumulated depreciation and amortization

(73,494)

(56,242)

Total property, plant and equipment, net

$
181,675

$
180,455

~~Capitalized amounts related~~therefore, a contract amendment to coal reserves at properties where we are not currently developing or actively engaged in mining operations totaled $14.7 million as of September 30, 2021 and $15.4 million as of December 31, 2020.replace LIBOR is considered unlikely.

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NOTE 3—PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:



(In thousands)	September 30, 2022		December 31, 2021
Plant and equipment	$	203,529	$	167,019
Mining property and mineral rights		120,708		26,064
Construction in process		38,932		9,972
Capitalized mine development costs		145,304		104,291
Less: accumulated depreciation and amortization		(105,343)		(80,269)
Total property, plant and equipment, net	$	403,130	$	227,077

Capitalized amounts related to coal reserves at properties where we are not currently developing or actively engaged in mining operations totaled $46.2 million as of September 30, 2022 and $25.1 million as of December 31, 2021.

In addition to the amounts discussed above, on July 10, 2022, we experienced a material methane ignition at our Berwind mining complex. The cause of the ignition is presently unknown. We, in conjunction with the appropriate state and federal regulatory authorities, have been conducting a full investigation into the incident, which is still ongoing. The mine was idle at the time of the incident, and there were no personnel in the mine nor any injuries or fatalities. Due to regulatory oversight related to safety conditions, the Company has not yet inspected the area of the mine where the ignition event occurred. Accordingly, we have not yet estimated the damages incurred or determined a remediation and restart plan. As a result, no entries have been recorded for a potential loss relating to this matter. Production from the Berwind Complex is expected to be impacted for an indeterminant period of time. We will provide additional information regarding plans for both the rehabilitation and restarting of the mine as it becomes available.

Depreciation and amortization included:



	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020		2022		2021		2022		2021
Depreciation of plant and equipment	$	4,484	$	4,326	$	13,354	$	12,740	$	6,763	$	4,484	$	16,864	$	13,354
Depreciation of right of use assets		413		—		540		—
Depreciation of right of use assets (financing leases)										1,710		413		3,806		540
Amortization of capitalized
mine development costs		1,854		932		4,967		2,861		2,962		1,854		9,228		4,967
Total depreciation and amortization	$	6,751	$	5,258	$	18,861	$	15,601	$	11,435	$	6,751	$	29,898	$	18,861

NOTE 4—DEBT

Revolving Credit Facility and Term Loan—On November 2, 2018, we entered into a Credit and Security Agreement (as amended or amended and restated the “Revolving Credit Facility” or the “Credit Agreement”) with KeyBank National Association (“KeyBank”)., as the administrative agent, and other lenders party thereto. The Credit Agreement was amended on February 20, 2020 and March 19, 2021. On October 29, 2021, we entered into the Amended and ~~consists~~Restated Credit and Security Agreement (the “Amendment and Restatement”) with KeyBank. Prior to the Amendment and Restatement, the Credit Agreement consisted of athe $10.0 million term loan (the “Term Loan”) and up to $30.0 million ~~in the form of a~~ revolving line of credit, ~~(the “Revolving Credit Facility”),~~ including $3.0 million letter of credit availability. The Amendment and Restatement increased the overall availability under the revolving credit line to $40.0 million and extended the maturity date to December 31, 2024. All personal property assets, including, but not limited to accounts receivable, coal inventory and certain mining equipment are pledged to secure the Revolving Credit ~~Agreement.~~Facility. On April 29, 2022, we entered into the First Amendment to Amended and Restated Credit and Security Agreement with KeyBank to allow for the Ramaco

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Coal asset acquisition. On September 23, 2022, we entered into the Second Amendment to Amended and Restated Credit and Security Agreement with KeyBank to allow for the Maben Coal acquisition.

The Revolving Credit Facility ~~has a maturity date of December 31, 2023 and~~ bears interest based on ~~LIBOR~~Secure Overnight Financing Rate (“SOFR”) + 2.0% or Base Rate + 1.5%. ~~Base Rate~~“Base Rate” is the highest of (i) KeyBank’s prime rate, (ii) Federal Funds Effective Rate + 0.5%, or (iii) ~~LIBOR~~SOFR + 2.0%. Advances under the Revolving Credit Facility are made initially as ~~base rate~~Base Rate loans but may be converted to ~~LIBOR~~SOFR rate loans at certain times at our discretion. At September 30, ~~2021,~~2022, there was ~~0 amount~~a $17.0 million borrowing and a $0.4 million letter of credit outstanding under the Revolving Credit Facility, ~~and we had~~leaving $22.6 million of remaining ~~availability of $27.1 million.~~

availability.

The Term Loan is secured under a Master Security Agreement with a pledge of certain underground and surface mining equipment, bears interest at LIBOR + 5.15% and is required to be repaid in monthly installments of $278 thousand including accrued interest. The outstanding principal balance of the Term Loan was ~~$4.2~~$0.8 million at September 30, ~~2021.~~

2022.

The Credit Agreement contains usual and customary covenants including limitations on liens, additional indebtedness, investments, restricted payments, asset sales, mergers, affiliate transactions and other customary limitations, as well as financial covenants. At September 30, ~~2021,~~2022, we were in compliance with all ~~debt~~financial covenants inunder the Credit Agreement.

Key Equipment Finance Loan—On April 16, 2020, we entered into an equipment loan with Key Equipment Finance, a division of KeyBank, as lender, in the principal amount of ~~approximately~~ $4.7 million for the financing of existing underground and surface equipment (the “Equipment Loan”). The Equipment Loan bears interest at 7.45% per annum and is payable in 36 monthly installments of $147 thousand. There is a 3% premium for prepayment of the note within the first 12 months. This premium declines by 1% during each successive 12-month period. The outstanding principal balance ~~under~~of the Equipment Loan was ~~$2.6~~$1.0 million at September 30, ~~2021.~~2022.

9.00% Senior Unsecured Notes due ~~2026~~2026——On July 13, 2021, we completed an offering of $34.5 million, in the aggregate, of the Company’s 9.00% Senior Unsecured Notes due 2026 (the ~~“Notes”~~“Senior Notes”), ~~less~~and incurred $2.4 million for note offering costs. The Senior Notes mature on July 30, 2026, unless redeemed prior to maturity. The Senior Notes bear interest at a rate of 9.00% per annum, payable quarterly in arrears on the 30th day of January, April, July and October of each ~~year, commencing on July 30, 2021.~~year. We may redeem the Senior Notes in whole or in part, at our option, at any time on or after July 30, 2023, or upon certain change of control events, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to, but not including, the date of ~~redemption~~ redemption. Issuance costs for the Senior Notes included underwriters’ fees, attorney, accounting and filing costs totaling $2.4 million. These issuance costs are reported as a debt discount which is being amortized over the Senior Notes term using an effective rate method. The outstanding principal balance under the Senior Notes was $34.5 million at September 30, ~~2021.~~2022 and is presented net of unamortized discounts of $1.8 million. The effective interest rate is approximately 10.45%.

J. H. Fletcher & Co. Loan—On July 23, 2021 and November 24, 2021, we entered into an equipment ~~loan~~loans with J. H. Fletcher & Co., as lender, in the principal amount of ~~approximately $1.0~~$0.9 million and $3.9 million, respectively, for the financing of underground equipment (the “Fletcher Equipment ~~Loan”~~Loans”). The Fletcher Equipment ~~Loan bears~~Loans bear no interest ~~at 0% per annum~~ and isare payable in 24monthly installments of $200 thousand. In the third quarter of 2022, we obtained additional equipment loans of $4.4 million. The 2022 loans bear no interest and are payable in 24 monthly

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installments of ~~$40~~$195 thousand. The outstanding principal balance ~~under~~of the 2021 and 2022 Fletcher Equipment ~~Loan~~Loans was ~~approximately $0.8~~$6.4 million at September 30, ~~2021.~~2022.

Komatsu Financial Limited Partnership Loan—On August 16, 2021, we entered into an equipment loan with Komatsu Financial Limited Partnership, as lender, in the principal amount of ~~approximately~~ $1.0 million for the financing of surface equipment (the “Komatsu Equipment Loan”). The Komatsu Equipment Loan bears interest at 4.6% per annum and is payable in 36 monthly installments of $36 thousand for the first six months and then at $28 thousand until maturity. The outstanding principal balance ~~under~~of the Komatsu Equipment Loan was ~~approximately $1.0~~$0.6 million at September 30, ~~2021.~~2022.

Brandeis Machinery & Supply Company—On January 11, 2022, we entered into equipment loans with Brandeis Machinery & Supply Company, as lender, in the principal amount of $1.4 million for the financing of surface equipment

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(the “Brandeis Equipment Loans”). The Brandeis Equipment Loans bear interest at 4.8% per annum and are payable in 48 monthly installments of $24 thousand. The outstanding principal balance of the Brandeis Equipment Loans was $0.8 million at September 30, 2022.

Ramaco Coal Deferred Purchase Price—On April 29, 2022, we acquired the assets of Ramaco Coal (see Note 12) and entered into an agreement whereby an investment fund managed by Yorktown Partners, as lender, provided financing for the acquisition in the principal amount of $55.0 (the “Ramaco Coal Loan”). The Ramaco Coal Loan bears interest at 9% per annum and is payable in seven quarterly installments of $5 million each quarter in 2022 and $10 million each quarter in 2023 until maturity. The outstanding principal balance of the Ramaco Coal Loan was $45.0 million at September 30, 2022 and is secured by the membership interests of Ramaco Coal, LLC. In the event we make an initial public offering of the equity interests of all or substantially all of the acquired assets of Ramaco Coal, the seller shall have the option to convert up to fifty percent (50%) of the then outstanding principal balance, not to exceed $30 million, into a proportionate equity ownership in such initial public offering.

Financing of Maben Coal Acquisition – On September 23, 2022, we acquired 100% of the equity interests of Maben Coal, LLC (see Note 12) and entered into a secured loan with Investec Bank PLC in the amount of $21.0 million to pay a portion of the purchase price. The loan bears interest at the applicable secured overnight financing rate (“SOFR”) plus a margin of 3.0% payable in cash, compounded monthly. Beginning in January 2023, the Company must start making monthly repayments of the outstanding principal in the amount of $800 thousand per month until the maturity date of September 23, 2024. The outstanding principal balance of $21.0 million at September 30, 2022, was reported in the current portion of long-term debt and long-term debt, net in the amounts of $7.2 million and $13.8 million, respectively.

NOTE 5—LEASES

The Company has various financing leases for mining ~~equipment which originated in the second and third quarters of 2021.~~equipment. These leases are generally for terms up to 36 months and expire through ~~2024.~~2025. We ~~have 1~~had one operating lease for office space that ~~will expire mid-2022.~~expired in May 2022. A new operating lease for office space was entered into during August 2022 and has a term of 60 months.

Right-of-use assets and lease liabilities are determined as the present value of the lease payments, discounted using either the implicit interest rate in the lease or our estimated incremental borrowing rate based on similar terms, payments and the economic environment where the leased asset is located. Below is a summary of our leases:

(In thousands)
Classification

September 30, 2021

December 31, 2020

Right-of-use assets

Financing
Financing lease right-of-use assets, net

$
8,897

$
—
Operating
Other assets

44

110
Total right-of-use assets

$
8,941

$
110

Current lease liabilities

Financing
Current portion of financing lease obligations

$
3,057

$
—
Operating
Other current liabilities

44

79
Non-current lease liabilities

Financing
Long-term portion of financing lease obligations

$
4,847

$
—
Operating
Other long-term liabilities

—

31
Total lease liabilities

$
7,948

$
110

~~Minimum lease payments for our lease obligations are as follows:~~

September 30, 2021
(In thousands)

Financing

Operating

Total

Future minimum lease payments:

2021

$
731

$
16

$
747
2022

3,510

41

3,551
2023

3,173

—

3,173
2024

945

—

945
Total undiscounted lease payments

8,359

57

8,416
Less: Amounts representing interest

(455)

(13)

(468)
Present value of lease obligations

$
7,904

$
44

$
7,948

Weighted average remaining term (years)

2.6

0.6

Weighted average discount rate

4.1%

8.5%


(In thousands)	Classification	September 30, 2022		December 31, 2021

Right-of-use assets
Financing	Financing lease right-of-use assets, net	$	9,839	$	9,128
Operating	Other assets		694		25
Total right-of-use assets		$	10,533	$	9,153

Current lease liabilities
Financing	Current portion of financing lease obligations	$	4,776	$	3,461
Operating	Accrued expenses		80		25
Non-current lease liabilities
Financing	Long-term portion of financing lease obligations	$	3,783	$	4,599
Operating	Other long-term liabilities		617		—
Total lease liabilities		$	9,256	$	8,085

NOTE 6—EQUITY

Stock-Based Compensation Awards—Our Long-Term Incentive Plan (“LTIP”) is currently authorized by shareholders for the issuance of awards of up to approximately 10.9 million shares of common stock. As of September 30, 2022, there were approximately 5.4 million shares of common stock available for grant under the LTIP, which

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~~NOTE 6—SBA PAYCHECK PROTECTION PROGRAM LOAN~~

On April 20, 2020, we received proceeds from the PPP Loan in the amount of approximately $8.4 million from KeyBank, as lender, pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The purpose of the PPP was to encourage the continued employment of workers. We used all of the PPP Loan proceeds for eligible payroll expenses, lease, interest and utility payments.

The PPP Loan was evidenced by a promissory note dated April 16, 2020, which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties.

~~Pursuant to the subsequently enacted~~ ~~Paycheck Protection Flexibility Act of 2020~~, we were permitted to defer required monthly payments of principal and interest until such time as an approval or denial of forgiveness is received from the U.S. Small Business Administration (“SBA”). In 2020, we recognized $8.4 million as other income in the consolidated statement of operations as we expect the full amount of the PPP Loan principal, together with accrued interest thereon, will be forgiven.

~~On July 29, 2021, we were notified by KeyBank that full forgiveness had been approved by the SBA.~~

~~NOTE 7—EQUITY~~includes 4.0 million authorized shares that became effective on February 23, 2022. Additionally, granted but unvested shares are generally forfeited upon termination of employment, unless an employee enters into another written arrangement, and may not be sold, assigned, transferred, pledged or otherwise encumbered.

~~Stock-Based Compensation—~~~~We have a~~As of September 30, 2022, we had four types of stock-based ~~compensation plan under which stock~~awards outstanding: options, restricted stock, restricted stock units and performance ~~shares and other~~stock units. Stock-based compensation expense for all four types of stock-based awards ~~may be granted. At~~totaled $2.0 million and $1.3 million for the three months ended September 30, 2022 and September 30, 2021, ~~1.9~~respectively. Stock-based compensation expense for all four types of stock-based awards totaled $6.2 million ~~shares were reserved under~~and $3.9 million for the ~~current plan~~nine months ended September 30, 2022 and September 30, 2021, respectively.

The following table summarizes stock-based awards outstanding, as well as activity for ~~future awards.~~the period:


	Restricted Stock			Restricted Stock Units			Performance Stock Units
		Weighted			Weighted			Weighted
		Average Grant			Average Grant			Average Grant
	Shares	Date Fair Value		Shares	Date Fair Value		Shares	Date Fair Value
Outstanding at December 31, 2021	3,741,770	$	3.98	—	$	—	—	$	—
Granted	214,363		14.59	248,706		15.65	248,706		22.21
Vested	(715,665)		5.38	—		—	—		—
Forfeited	(637)		15.65	—		—	—		—
Outstanding at September 30, 2022	3,239,831	$	4.37	248,706	$	15.65	248,706	$	22.21

Options for the purchase of a total of 937,424 shares of our common stock ~~with an exercise price of~~for $5.34 per share were granted to 2two executives on August 31, 2016. The options have a ten-year term from the grant date and are fully vested. During the three months ended September 30, 2022, 20,000 options were exercised. The remaining options ~~remain~~are outstanding and unexercised and ~~the exercise price is less than the average stock price for the three and nine month periods ended~~were in-the-money at September 30, ~~2021.~~2022 with an intrinsic value of $3.5 million.

Restricted Stock—We grant shares of restricted stock to certain senior executives, key employees and directors. These shares vest over approximately one to three and a half years from the date of grant. During the vesting period, the participants have voting rights and may receive ~~dividends, but~~dividends. Upon vesting, the shares may not be sold, assigned, transferred, pledged or otherwise encumbered. Additionally, granted but unvested shares are generally forfeited upon termination of employment, unless an employee enters into another written arrangement.restricted stock becomes unrestricted common shares. The fair value of the restricted stock on the date of the grant during 2022, which averaged $14.59 per share, is amortized ratably over the service period. ~~Compensation expense related to these awards totaled $1.3 million and $3.9 million for the three and nine months ended September 30, 2021, respectively.~~ At September 30, ~~2021,~~2022, there was ~~$8.5~~$6.3 million of total unrecognized compensation cost related to unvested restricted stock to be recognized over a weighted-average period of ~~1.8~~1.1 years.

Restricted Stock Units—We grant shares of restricted stock units to certain senior executives and key employees. These share units vest ratably over approximately three years from the date of grant. During the vesting period, the participants have no voting rights and no dividend rights; however, participants are entitled to receive dividend equivalents, which shall be subject to the same conditions applicable to the units and payable at the time the units vest, which did not occur during the nine months ended September 30, 2022. Upon vesting and within 30 days thereafter, the recipient will receive one share of common stock for each stock unit.

The ~~following table summarizes~~248,706 restricted ~~awards outstanding, as well as activity~~stock units are linked to the Company’s common stock value which was fair valued on the date of grant at $15.65 per share and is recognized ratably over the service period. At September 30, 2022, there was $3.0 million of total unrecognized compensation cost related to unvested restricted stock units to be recognized over a weighted-average period of 2.3years.

Performance Stock Units—We grant shares of performance stock units to certain senior executives and key employees. These share units cliff-vest approximately three years from the date of grant based on the achievement of targeted performance levels related to pre-established relative total shareholder return goals. These performance stock units have the potential to be earned from 0% to 200% of target depending on actual results. During the vesting period, the participants have no voting rights and no dividend rights; however, participants are entitled to receive dividend equivalents, which shall be subject to the same conditions applicable to the units and payable at the time the units vest, which did not occur during the nine months ended September 30, 2022. Upon vesting and within 30 days thereafter, the recipient will receive one share of common stock for each stock unit.

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The Company’s 248,706 performance stock units were valued relative to the ~~period:~~stock price performance of a peer group of companies at a valuation stock price of $15.65 per share, which was fair valued at $22.21 per share at the date of grant based on a Monte Carlo simulation. The fair value of the performance stock units on the date of the grant is recognized ratably over the service period. At September 30, 2022, there was $4.3 million of total unrecognized compensation cost related to unvested performance stock units to be recognized over a weighted-average period of 2.3years.

Dividends –On February 18, 2022, the Company announced that its Board of Directors approved an increase in its initial quarterly cash dividend to $5.0 million from the formerly approved $2.5 million that was declared and accrued in December 2021. Dividends in the amount of $5.0 million, or approximately $0.11 per share of common stock, were paid on March 15, 2022, to shareholders of record on March 1, 2022.

Weighted

Average Grant

Shares

Date Fair Value
Outstanding at December 31, 2020

2,845,525

$
4.28
Granted

1,592,659

4.37
Vested

(321,075)

8.03
Forfeited

(129,279)

4.11
Outstanding at September 30, 2021

3,987,830

$
4.02

In addition, dividends in the amount of $5.0 million, or approximately $0.11 per share of common stock, were paid on June 15, 2022, to shareholders of record on June 1, 2022, and dividends in the amount of $5.0 million, or approximately $0.11 per share of common stock, were paid on September 15, 2022, to shareholders of record on September 1, 2022.

On September 28, 2022, the Company announced that its Board of Directors declared a quarterly cash dividend of approximately $0.11 per share of common stock. Dividends of $5.0 million were accrued at September 30, 2022, and are payable on December 15, 2022, to shareholders of record on December 1, 2022.

NOTE 8—7—COMMITMENTS AND CONTINGENCIES

Surety Bonds—At September 30, ~~2021,~~2022, we had total reclamation bonding requirements of ~~$15.8~~$22.6 million which were supported by surety bonds. Additionally, we had $0.3 million of surety bonds that secured performance obligations.

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Contingent Transportation Purchase Commitments—We secure the ability to transport coal through rail contracts and export terminal services contracts that are sometimes funded through take-or-pay arrangements. At September 30, ~~2021,~~2022, contingent liabilities under these take-or-pay arrangements totaled ~~$4.6~~$5.4 million under 4three contracts expiring at various dates between December 31, ~~2021,~~2022, and March 31, 2024. The level of these take-or-pay liabilities will be reduced at a per ton rate as such rail and export terminal services are utilized against the required minimum tonnage amounts over the contracts term stipulated in such rail and export terminal contracts.

Litigation—From time to time, the Company may be subject to various litigation and other claims in the normal course of business. No amounts have been accrued in the consolidated financial statements with respect to any matters.

OnIn November 5, 2018, one of our three raw coal storage silos that fed our Elk Creek plant experienced a partial structural failure. A temporary conveying system completed in late-November 2018 restored approximately 80% of the plant capacity. We completed a permanent belt workaround and restored the preparation plant to its full processing capacity in mid-2019. Our insurance carrier ~~Federal Insurance Company,~~ disputed our claim for coverage ~~based on certain exclusions to the applicable policy,~~ and ~~therefore, on~~in August ~~21,~~ 2019 we filed suit against Federal Insurance Company and Chubb INA Holdings, Inc. in Logan County Circuit Court in West Virginia seeking a declaratory judgment that the partial silo collapse was an insurable event and required coverage under our policy. Defendants removed the case to the United States District Court for the Southern District of West Virginia, and upon removal, we substituted ACE American Insurance Company as a defendant in place of Chubb INA Holdings, Inc.

suit. The case went to trial ~~beginning on~~in June ~~29, 2021. On~~2021 and in July ~~15,~~ 2021, the jury returned a verdict in our favor ~~of the Company~~ for $7.7 million in compensatory damages and ~~on July 16, 2021,~~ made an additional award of $25.0 million for inconvenience and aggravation. ~~Additionally,~~In August 2021, the ~~Company~~defendants filed a post-trial motion. On March 4, 2022, the court entered its memorandum opinion and order on the motion reducing the jury award to a total of $1.8 million, including pre-judgment interest, based largely on the court’s decision to vacate and set aside, in its entirety, the jury award of damages for inconvenience and aggravation. The same day, the court entered the judgment in accordance with the memorandum opinion and order. No amount is ~~seeking to recover its attorney’s fees and costs. This verdict is not final and may be subject to post-trial motions or appeal. We have, therefore, not recognized any gain~~currently reflected in the financial statements related to this ~~verdict as~~matter.

On April 1, 2022, we filed a notice of ~~September 30, 2021.~~appeal with the U.S. Court of Appeals for the Fourth Circuit. The matter has been fully briefed by the parties and is now pending before the court.

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NOTE 9—8—REVENUE

Our revenue is derived from contracts for the sale of coal which is recognized at the point in time control is transferred to our customer. Generally, domestic sales contracts have terms of about one year and the pricing is typically fixed. Export sales have spot or term contracts and pricing can either be by fixed-price or a price derived against index-based pricing mechanisms. Sales completed with delivery to an export terminal are reported as export revenue. Disaggregated information about our revenue is presented below:


	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020		2022		2021		2022		2021
Coal Sales
North American revenues	$	47,954	$	27,284	$	105,611	$	89,795
Export revenues, excluding Canada		28,423		12,175		90,278		27,974
Total revenues	$	76,377	$	39,459	$	195,889	$	117,769
North American revenue									$	78,442	$	47,954	$	231,365	$	105,611
Export revenue, excluding Canada										58,483		28,423		199,096		90,278
Total revenue									$	136,925	$	76,377	$	430,461	$	195,889

At September 30, ~~2021,~~2022, we had outstanding performance obligations for the remainder of ~~2021~~2022 of approximately 0.5 million tons for contracts with fixed sales prices averaging ~~$84/~~$197/ton and 0.3 million tons for contracts with index-based pricing mechanisms. Additionally, we had outstanding performance obligations for 2023 of approximately 1.4 million tons for contracts with fixed sales prices averaging $198/ton and 0.1 million tons for contracts with index-based pricing mechanisms. Index-based prices have not been estimated for the purpose of disclosing remaining performance obligations as permitted under the revenue recognition guidance when variable consideration is allocated entirely to a wholly unsatisfied performance obligation.

NOTE ~~10—~~9—INCOME TAXES

Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax ~~impact~~impacts of discrete items are recognized in the period these occur.

~~The following table summarizes income~~Our effective tax ~~expense, including~~rate for the three months ended September 30, 2022 and September 30, 2021 was 20% and 21%, respectively. Our effective tax rate, again excluding discrete items, for the nine months ended September 30, 2022 and 2021 was 21.9% and 13%, respectively. Discrete items during the 2021 periods included the impact of legislative changes in West Virginia and Virginia for which we recognized a tax benefit of $1.6 million. We also reported discrete items ~~for~~related to stock-based compensation in 2022 and 2021 periods. The primary difference from the federal statutory rate of 21% in each period ~~presented:~~is related to state taxes, permanent differences for non-deductible expenses and depletion expense for income tax purposes.

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Three months ended September 30,

Nine months ended September 30,
(In thousands)

2021

2020

2021

2020
Deferred income tax expense (benefit)

$
1,817

$
(1,407)

$
3,046

$
(473)
Discrete items:

State income taxes - West Virginia

(229)

—

(1,615)

—
Stock-based compensation

—

—

219

435
Total income tax expense (benefit)

$
1,588

$
(1,407)

$
1,650

$
(38)

Discrete items include the impact of legislative changes in Virginia and West Virginia and tax expense for the excess of book expense over the tax deduction for vested restricted stock awards. Excluding these discrete items, our effective tax rate for the three months ended September 30, 2021 and 2020 was 21% and 23%, respectively. Similarly, our effective tax rate for the nine months ended September 30, 2021 and 2020 was 13% and 19%, respectively. The primary difference from the federal statutory rate of 21% in each period is related to state taxes, permanent differences for non-deductible expenses and depletion expense for income tax purposes.

NOTE ~~11—~~10—EARNINGS ~~(LOSS)~~ PER SHARE

The following is the computation of basic and diluted EPS:


	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
(In thousands, except per share amounts)	2021		2020		2021		2020		2022		2021		2022		2021
Numerator
Net income (loss)	$	7,035	$	(4,776)	$	21,120	$	(162)
Net income									$	26,905	$	7,035	$	101,656	$	21,120
Denominator
Weighted average shares used to compute basic earnings (loss) per share		44,109		42,647		43,915		42,373
Dilutive effect of stock-based awards		356		—		81		—
Weighted average shares used to compute diluted earnings (loss) per share		44,465		42,647		43,996		42,373
Weighted average shares used to compute basic earnings per share										44,085		44,109		44,179		43,915
Dilutive effect of stock option awards										458		356		560		81
Dilutive effect of restricted stock units and performance stock units awards										—		—		8		—
Weighted average shares used to compute diluted earnings per share										44,543		44,465		44,747		43,996

Earnings (loss) per share
Basic	$	0.16	$	(0.11)	$	0.48	$	(0.00)	$	0.61	$	0.16	$	2.30	$	0.48
Diluted	$	0.16	$	(0.11)	$	0.48	$	(0.00)	$	0.60	$	0.16	$	2.27	$	0.48

Diluted earnings ~~(loss)~~ per share ~~in each of~~for the three ~~and nine month periods~~months ended September 30, ~~2020~~2022, excludes ~~937,424 options to purchase our common stock~~249 thousand of RSUs because ~~their~~the effect would have been antidilutive. Diluted earnings per share for the three months ended September 30, 2022, also excludes 249 thousand of performance stock units based on the guidance for contingently issuable shares, which requires exclusion when based on current period results, the shares would not be ~~anti-dilutive.~~issuable if the end of the reporting period were the end of the contingency period. The performance stock units were excluded from diluted earnings per share for the nine months ended September 30,2022 as well.

NOTE ~~12—~~11—RELATED PARTY TRANSACTIONS

Mineral Lease and Surface Rights Agreements—Prior to the acquisition of Ramaco Coal, LLC (“Ramaco Coal”), see Note 12, m~~Much~~uch of the coal reserves and surface rights that we control were acquired through a series of mineral leases and surface rights agreements with Ramaco Coal, ~~LLC (“Ramaco Coal”),~~who was a related party. Production royalty payables totaling ~~$0.6 million and~~ $0.4 million at ~~September 30, 2021 and~~ December 31, ~~2020, respectively,~~2021 were included in accounts payable in the consolidated balance ~~sheets.~~sheet. Royalties paid to Ramaco Coal in 2022, prior to the acquisition, totaled $3.1 million. Royalties paid to Ramaco Coal in the three and nine months ended September 30, 2021 totaled $1.3 million and $3.9 million, respectively. ~~In the three and nine months ended September 30, 2020, royalties paid to Ramaco Coal totaled $1.0 million and $3.3 million, respectively.~~

~~On-going~~ Administrative Services—~~Under a Mutual Services Agreement dated December 22, 2017 but effective as~~Also prior to the acquisition of ~~March 31, 2017,~~Ramaco Coal, the Company and Ramaco Coal agreed to share the services of certain of each company’s ~~employees.~~employees pursuant to a Mutual Service Agreement, dated December 22, 2017 but effective as of March 31, 2017. Each party ~~will pay~~paid the other a fee on a quarterly basis for such services calculated as the annual base salary of each employee providing services multiplied by the percentage of time each employee spent providing services for the other party. ~~The services will be provided for 12-month terms, but may be terminated by either party at the end of any 12-month term by providing written notice at least 30 days~~Year-to-date charges to Ramaco Coal in 2022, prior to the ~~end of~~acquisition, were $44 thousand. For the ~~then-current term. Charges~~three and nine months ended September 30, 2021, charges to Ramaco Coal were $40 thousand and $79 thousand, ~~respectively,~~respectively.

Legal Services—Some of the professional legal services we receive are provided by Jones & Associates (“Jones”), a related party. Legal services payable totaled $0.6 million at September 30, 2022 and were included in accrued expensesin the consolidated balance sheet. There were no legal services payable as of December 31, 2021. No legal services were paid to Jones in the three months ended September 30, 2022 and September 30, 2021. Legal services paid to Jones in the nine months ended September 30, 2022 and September 30, 2021 totaled $0.8 million and zero, respectively.

Ramaco Coal Deferred Purchase Price—As part of the financing of the acquisition of Ramaco Coal (see Note 12), we incurred interest expense of $1.1 million and $2.0 million for the three and nine months ended September 30, 2022.

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~~September 30, 2021. For~~

Ramaco Foundation--The Company made a charitable cash contribution of $1.0 million in the ~~three~~third quarter of 2022 to the Ramaco Foundation, which was recognized in Other income (expense), net, on the income statement. The Ramaco Foundation is an unconsolidated not-for-profit organization whose board of directors includes several members of the Company’s management and ~~nine month periods ended September 30, 2020, charges to~~board of directors.

NOTE 12—ACQUISITIONS

Ramaco Coal

On April 29, 2022, the acquisition of Ramaco Coal, ~~were $16 thousand~~an entity owned by an investment fund managed by Yorktown Partners and ~~$31 thousand, respectively.~~

~~NOTE 13—SUBSEQUENT EVENTS~~

~~2022 Domestic Sales Contracts~~—~~On October 26, 2021, Ramaco announced that it has~~certain members of the Company's management, was completed 2022 sales negotiations to its North American steel customers. We have now contracted to sell 1.67 million tons of both low volatile and high volatile coal at an overall average price of roughly $196 per short ton FOB mine. These completed domestic sales represent approximately 54% of Ramaco’s projected 2022 production of 3.1 million tons.

~~Coronado Asset Purchase Agreement~~—On October 26, 2021, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Coronado IV LLC, Buchanan Minerals, LLC and Buchanan Mining Company, LLC (collectively, the “Sellers”), pursuant to ~~which the Company will~~a Purchase and Sale Agreement, dated February 23, 2022. The purchase ~~certain assets from Sellers for~~price was approximately $65 million, consisting of an ~~aggregate cash~~initial payment of $10 million paid at closing and a deferred purchase price of ~~$30~~$55 million (the “Acquisition”). The closing of the transactions contemplated by the Purchase Agreement is subject to customary closing conditions. The Purchase Agreement contains representations, warranties and covenants from the Company that are customary for transactions of this type. The Acquisition is expected to close in mid-November 2021.

~~Dividend Initiation Authorization~~—~~On October 26, 2021, we announced that our Board of Directors (the “Board”) authorized the initiation of a regular quarterly dividend~~ to be paid during the remainder of 2022 in $5 million ratable quarterly installments, and $10 million ratable quarterly installments to be paid in 2023 plus interest at a rate of 9%.

Ramaco Coal controls certain coal mineral interests of principally metallurgical coal properties which are owned in fee or leased under long-term leases that are, in turn, leased or subleased to the Company and various third parties. Such lessees pay a royalty based on the amount of metallurgical coal mined and the realized price per ton.

Ramaco Coal also controls a large thermal coal deposit and permit near Sheridan, Wyoming covering approximately 16 thousand acres, including a research and development facility and associated equipment and has a goal of converting coal to carbon products, such as graphene, graphite and carbon fiber.

Concurrent with this acquisition, the Company and Ramaco Coal each sold certain mineral rights located in West Virginia (the “Split Ridge Arrangement”). To compensate for the sale of these rights, we received an overriding royalty arrangement which included $2 million up front and $125 thousand quarterly minimum royalty payment beginning in ~~the first quarter~~January 2024 until December 2028. The fair value of ~~2022. The amount of the dividend and timing of both the record date and payment date will be set at the Company’s Board meeting to be held in early December of 2021.~~

~~Amendment of Revolving Credit Facility and Term Loan~~ —On October 29, 2021, the Company entered into an Amended and Restated Credit and Security Agreement (“the Credit Agreement Amendment”) with KeyBank, pursuant to which KeyBank agreed to increase the Company’s revolving line of credit under the Credit Agreement by $10 million to an aggregate of $40this arrangement was $3.7 million, of which, ~~no amounts were outstanding immediately prior to entering into the Credit Agreement Amendment. The Credit Agreement Amendment also extended the maturity date~~$1.6 million was treated as an allocation of the ~~Revolving Credit Facility~~fair value of this disposed component of Ramaco Coal and, separately, a $2.1 million gain on the sale of the Company’s mineral rights included in Other income (expense), net on the income statement.

The acquisition of Ramaco Coal was accounted for as a purchase of assets due to ~~December 31, 2024.~~substantially all of the fair value being concentrated in a single asset, the rights to metallurgical coal deposits. The consideration paid in connection with the acquisition of Ramaco Coal, including $1.6 million in closing costs, relinquishment of $1.6 million of prepaid royalties and $0.1 million paid to a mineral owner as part of the acquisition, was approximately $68.3 million and was allocated based on fair values to mining property and mineral rights ($65.1 million), buildings ($2.6 million) and equipment ($0.6 million). Refer to Note 4 for a description of the acquisition financing.

Maben Coal

On September 23, 2022, the Company completed the acquisition of 100% of the equity interests of Maben Coal, LLC (“Maben Coal”) pursuant to the Securities Purchase Agreement dated August 8, 2022, with Appleton Coal, LLC. The purchase price was approximately $30.0 million, consisting of an initial payment of $9.0 million and proceeds from a new two-year loan in the amount of $21.0 million. The Company also paid approximately $1.7 million of transaction costs and recognized liabilities of $1.3 million, primarily related to $1.2 million of cash bond replacement obligations incurred by the Company as part of the transaction.

We acquired a large coal deposit on approximately 28 thousand leased acres located in Wyoming County and Raleigh County, West Virginia. We assumed existing mining permits issued by the West Virginia Department of Environmental Protection, which authorize mining by both surface and highwall mining methods as well as by underground methods. The property also has issued permits covering an existing haul road, as well as an active refuse

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disposal area together with a preparation plant and unit train loadout, neither of which had been constructed as of the closing date.

The acquisition of Maben Coal was accounted for as a purchase of assets due to substantially all of the fair value being concentrated in a single asset, the rights to leased metallurgical coal deposits. The total consideration of approximately $33.0 million was allocated to mining property and mineral rights ($30.6 million), capitalized mine development costs ($1.0 million), receivable for the right to recover cash bond replacement payments owed by the Company discussed above ($1.2 million), and recoupable royalties ($0.2 million). Refer to Note 4 for information regarding the acquisition financing.

Fair Value

The consideration for both acquisitions above was allocated based on the relative fair values of the assets acquired, the primary asset of which was mining properties and mineral rights. The fair values of mining properties and mineral rights were determined based on Level 3 inputs, which are generally unobservable, requiring the Company to make assumptions based on a market participant perspective. Key Level 3 assumptions included future coal prices, capital expenditures, future coal production, production costs, and an appropriate rate at which to discount the future cash flows. We believe our assumptions to be consistent with those a market participant would use for valuation purposes.

* * * * *

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report, as well as the financial statements and related notes appearing elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. We caution you that our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences are discussed elsewhere in this Quarterly Report, particularly in the “Cautionary Note Regarding Forward-Looking Statements” and in our Annual Report and in this Quarterly Report under the heading “Item 1A. Risk Factors,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.

Overview

We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania. Our ~~primary source~~executive offices are located in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming. We are a pure play metallurgical coal company with 39 million reserve tons and 769 million of ~~revenue is the sale of metallurgical coal. As of September 30, 2021, we had a 261 million ton reserve base~~measured and indicated resource tons of high-quality metallurgical ~~coal~~coal. We believe our advantaged reserve geology provides us with higher productivities and aindustry leading lower cash costs.

Our development portfolio ~~including~~primarily includes four ~~primary properties. Our plan is to complete development~~properties: Elk Creek, Berwind, Knox Creek and RAM Mine. Each of these properties possesses geologic and logistical advantages that make our ~~existing properties and grow production to approximately 5 million clean tons of~~coal among the lowest delivered-cost U.S. metallurgical coal ~~subject~~ to ~~market conditions, permitting~~our domestic target customer base, North American blast furnace steel mills and ~~additional capital deployment. We may make~~coke plants, as well as international metallurgical and thermal coal consumers. In addition, the Company completed acquisitions of ~~reserves or infrastructure that continue our focus on advantaged geology~~Ramaco Coal and ~~lower costs.~~

~~The overall outlook of the metallurgical coal business is dependent on a variety of factors such as pricing, regulatory uncertainties and global economic conditions.~~Maben Coal ~~consumption and production~~ in the ~~U.S. have been driven~~second and third quarters of 2022, respectively. With the Ramaco Coal acquisition, we control coal deposits in ~~recent periods by several market dynamics~~Wyoming along with facilities that house research and ~~trends, such as~~development activities. With the ~~global economy, a strong U.S. dollar and accelerating production cuts.~~Maben Coal acquisition, the Company has obtained control of additional coal deposits in West Virginia.

During the ~~third quarter~~first nine months of ~~2021,~~2022, we sold ~~0.6~~1.8 million tons of coal. Of this, ~~75%~~54% was sold in North American markets, including Canada, and ~~25%~~46% was sold in export markets, ~~excluding Canada,~~ principally to Europe, South America, Asia and Africa. During the ~~third quarter~~same period of ~~2020, 69%~~2021, 54% of our sales were sold in North American markets, with the remaining ~~31%~~46% being sold into the export ~~markets, excluding Canada.~~markets.

~~The Company was adversely affected by~~COVID-19 continues to impact countries across the ~~deterioration~~world, and ~~increased uncertainty in~~ the ~~macroeconomic outlook as a result~~duration and severity of the impact of COVID-19. After the initial outbreak, we observed a declining demand for, and declines in the spot price of metallurgical coal as business and consumer activity decelerated across the globe. Throughout 2021, weeffects are seeing increases in demand from our primary customers, as the global economic recovery began. U.S. steel prices have also increased significantly due to this recovery and the effects from large-scale government stimulus measures.

~~Recent Developments~~

~~2022 Domestic Sales Contracts~~—~~On October 26, 2021, Ramaco announced that it has completed 2022 sales negotiations~~Regarding the military conflict involving Russia and Ukraine, resulting sanctions and future market or supply disruptions in the region, are impossible to ~~its North American~~predict, but could be significant and may have a severe adverse effect on the region. Globally, various governments have banned imports from Russia including commodities such as oil, natural gas and coal. These events have caused volatility in the commodity markets. This volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel ~~customers. We~~products, may have now contracted to sell 1.67 million tons of both low volatile and high volatile coal at an overall average price of roughly $196 per short ton FOB mine. These completed domestic sales represent approximately 54% of Ramaco’s projected 2022 production of 3.1 million tons.a significant effect on market

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~~Coronado Asset Purchase Agreement~~—prices and overall demand for our coal and the cost of supplies and equipment. We are closely monitoring the potential effects on the market.

Recent Developments

On ~~October 26, 2021,~~July 10, 2022, we experienced a material methane ignition at our Berwind mining complex. The cause of the ignition is presently unknown. We, in conjunction with the appropriate state and federal regulatory authorities, have been conducting a full investigation into the incident, which is still ongoing. The mine was idle at the time of the incident, and there were no personnel in the mine nor any injuries or fatalities. Due to regulatory oversight related to safety conditions, the Company ~~entered into~~has not yet inspected the ~~Purchase Agreement with the Sellers, pursuant to which the Company will purchase certain assets from Sellers for an aggregate cash purchase price of $30 million. The closing~~area of the ~~transactions contemplated by~~mine where the ~~Purchase Agreement is subject~~ignition event occurred. Accordingly, we have not yet estimated the damages incurred or determined a remediation and restart plan. As a result, no entries have been recorded for a potential loss relating to ~~customary closing conditions. The Purchase Agreement contains representations, warranties and covenants~~this matter. Production from the ~~Company that are customary for transactions of this type. The Acquisition~~Berwind Complex is expected to ~~close in mid-November 2021.~~

~~Dividend Initiation Authorization~~—~~On October 26, 2021, we announced that our Board~~be impacted for an indeterminant period of ~~Directors (the “Board”) authorized~~time. We will provide additional information regarding plans for both the ~~initiation of a regular quarterly dividend to be paid beginning in the first quarter of 2022. The amount~~rehabilitation and restarting of the ~~dividend and timing of both the record date and payment date will be set at the Company’s Board meeting to be held in early December of 2021.~~

~~Amendment of Revolving Credit Facility and Term Loan~~ —On October 29, 2021, the Company entered into an Amended and Restated Credit and Security Agreement (“the Credit Agreement Amendment”) with KeyBank, pursuant to which KeyBank agreed to increase the Company’s revolving line of credit under the Credit Agreement by $10 million to an aggregate of $40 million, of which no amounts were outstanding immediately prior to entering into the Credit Agreement Amendment. The Credit Agreement Amendment also extended the maturity date of the Revolving Credit Facility to December 31, 2024.mine as it becomes available.

Results of Operations


	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020		2022		2021		2022		2021

Consolidated statement of operations data (unaudited)
Revenue									$	136,925	$	76,377	$	430,461	$	195,889

Revenue	$	76,377	$	39,459	$	195,889	$	117,769
Costs and expenses
Cost of sales (exclusive of items shown separately below)		54,808		35,689		143,768		96,758		79,634		54,808		237,530		143,768
Asset retirement obligations accretion		156		128		461		428		495		156		1,485		461
Depreciation and amortization		6,751		5,258		18,861		15,601		11,435		6,751		29,898		18,861
Selling, general and administrative		5,895		5,966		15,767		15,723		8,672		5,895		29,282		15,767
Total costs and expenses		67,610		47,041		178,857		128,510		100,236		67,610		298,195		178,857

Operating income (loss)		8,767		(7,582)		17,032		(10,741)
Operating income										36,689		8,767		132,266		17,032

Other income		789		1,743		7,156		11,456
Other income (expense), net										(933)		789		1,781		7,156
Interest expense, net		(933)		(344)		(1,418)		(915)		(2,255)		(933)		(5,323)		(1,418)
Income (loss) before tax		8,623		(6,183)		22,770		(200)
Income before tax										33,501		8,623		128,724		22,770

Income tax expense (benefit)		1,588		(1,407)		1,650		(38)
Income tax expense										6,596		1,588		27,068		1,650

Net income (loss)	$	7,035	$	(4,776)	$	21,120	$	(162)
Net income									$	26,905	$	7,035	$	101,656	$	21,120

Earnings per common share
Basic									$	0.61	$	0.16	$	2.30	$	0.48
Diluted									$	0.60	$	0.16	$	2.27	$	0.48

Adjusted EBITDA	$	17,805	$	637	$	47,429	$	19,863	$	50,705	$	17,805	$	172,622	$	47,429

~~In each of~~During the three and nine ~~month periods~~months ended September 30, ~~2021,~~2022, our net income and Adjusted EBITDA were significantly higher compared to the same periods in ~~2020.~~2021. Sales ~~volumes were 45%~~pricing was higher by 92% and 121%, respectively, during the three and nine months ended September 30, 2022 than the same periods during 2021, which was primarily

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due to the global rebound of metallurgical demand from the previous effects of COVID-19. Other income for the nine months ended September 30, ~~2021 than~~2022 included $2.1 million related to the ~~same period during 2020, which was primarily a result~~sale of ~~the effects of COVID-19.~~mineral rights. In the ~~first~~ nine months ofended September 30, 2021, we recognized a total of $5.4 million in other income for the CARES Act Employee Retention Tax Credit. The Company does not expect to qualify for the CARES Act Employee Retention Tax Credit in the fourth quarter of 2021. In the first nine months of 2020, we recognized $8.4 million in other income for the anticipated forgiveness of the PPP Loan.

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Three Months Ended September 30, ~~2021~~2022 Compared to Three Months Ended September 30, ~~2020~~2021

Revenue. Our revenue includes sales ~~to customers~~ of Company produced coal and coal purchased from third parties. We include amounts billed by us for transportation to our customers within revenue and transportation costs incurred within cost of sales. Revenue per ton sold (FOB mine) and cash cost per ton sold (FOB mine) each exclude the impact of transportation billings and costs.

Coal sales information is summarized as follows:


	Three months ended September 30,						Three months ended September 30,
(In thousands)	2021		2020		Increase (Decrease)		2022		2021		Increase (Decrease)
Company Produced
Coal sales revenue	$	75,207	$	39,459	$	35,748	$	135,416	$	75,207	$	60,209
Tons sold		637		430		207		602		637		(35)
Purchased from Third Parties
Coal sales revenue	$	1,170	$	—	$	1,170	$	1,509	$	1,170	$	339
Tons sold		7		—		7		7		7		(0)

Coal sales revenue in the third quarter of ~~2021~~2022 was ~~$76.4~~$136.9 million, ~~94%~~79% higher than in the third quarter of ~~2020~~2021 primarily due to ~~increased tons sold in the third quarter of 2021 and~~ increased revenue per tons sold (FOB Mine). in the third quarter of 2022. Revenue per ton sold (FOB mine) increased ~~35%~~92% from ~~$78/ton in the third quarter of 2020 to~~ $105/ton in the third quarter of ~~2021.~~2021 to $202/ton in the third quarter of 2022. We sold ~~644~~608 thousand tons of coal in the third quarter of ~~2021,~~2022, a ~~50% increase~~6% decrease over the same period ~~of 2020.~~in 2021 due to rail-related constraints. We benefited from improved ~~spot~~domestic fixed and export spot/index pricing for metallurgical coal in ~~2021.~~2022. Additionally, favorable conditions in the steel and metallurgical markets contributed to an ~~increased~~increase demand for metallurgical ~~coal. We expect these conditions to continue in the next quarter.~~coal and stronger pricing.

Cost of sales. Our cost of sales totaled ~~$54.8~~$79.6 million for the three months ended September 30, ~~2021~~2022 as compared with ~~$35.7~~$54.8 million for the same period in ~~2020 due to significantly higher tons sold. The cash cost per ton sold (FOB mine) for the third quarter of~~ 2021 ~~was $72/ton, compared with $69/ton in the third quarter of 2020. Our cash cost per ton sold in the 2021 period was primarily~~ due to higher sales-related costs directly associated with higher revenue per ton sold in ~~2021. Our~~2022 and inflationary pressures on overall costs. The cash cost per ton sold (FOB mine) ~~of company produced tons~~ for the third quarter of ~~2021~~2022 was ~~$71/~~$99/ton, compared with ~~$69/~~$72/ton in the third quarter of ~~2020.~~2021.

Asset retirement obligation accretion. Asset retirement obligation accretion was $0.5 million for the three-month period ended September 30, 2022 and $0.2 million for the ~~three months~~three-month period ended September 30, ~~2021 and $0.1 million for the three months ended September 30, 2020.~~2021.

Depreciation and amortization. Depreciation and amortization expense was ~~$6.8~~$11.4 million and ~~$5.3~~$6.8 million for the three-month periods ended September 30, ~~2021~~2022 and September 30, ~~2020,~~2021, respectively, primarily due to ~~higher production volumes~~additional mining equipment placed in service in recent periods over the ~~third quarter of 2021.~~past year.

Selling, general and administrative. Selling, general and administrative expenses were ~~$5.9~~$8.7 million for the three months ended September 30, ~~2021~~2022 and ~~$6.0~~$5.9 million for the three months ended September 30, ~~2020.~~2021 primarily due to higher stock compensation, incentives and professional services in 2022, related to the Company’s production growth profile.

Other ~~income.~~income (expense), net. Other ~~income~~expense, net was ~~$0.8~~$1.0 million for the three months ended September 30, ~~2021.~~2022. For the three months ended September 30, ~~2020,~~2021, other income, net was ~~$1.7 million which includes $1.1 million for the PPP Loan forgiveness.~~$0.8 million.

Interest expense, net. Interest expense, net was approximately ~~$0.9~~$2.3 million during the three months ended September 30, ~~2021.~~2022. Interest expense, net was approximately ~~$0.3~~$0.9 million in the three months ended September 30, ~~2020.~~

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2021. Interest expense, net was higher compared to 2021 primarily due to debt incurred in the acquisition of Ramaco Coal in the second quarter of 2022.

Income tax expense. The effective tax rate for the three months ended September 30, 2022 and 2021 was 20% and 21%, respectively. The primary difference from the federal statutory rate of 21% is related to state taxes, permanent differences for non-deductible expenses and the difference in depletion expense between GAAP and federal income tax purposes.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Revenue. Coal sales information is summarized as follows:


	Nine months ended September 30,
(In thousands)	2022		2021		Increase (Decrease)
Company Produced
Coal sales revenue	$	424,058	$	190,211	$	233,847
Tons sold		1,753		1,707		46
Purchased from Third Parties
Coal sales revenue	$	6,403	$	5,678	$	725
Tons sold		22		44		(22)

Coal sales revenue in the nine months ended September 30, 2022 was $430.5 million, 120% higher than in the same period in 2021 principally due to revenue per ton sold (FOB mine) increasing 121% from $98/ton in the nine months ended September 30, 2021 to $217/ton in the same period in 2022. We sold 1.8 million tons of coal in the nine-month period ended September 30, 2022, which was in line with the same period in 2021.

Cost of sales. Our cost of sales totaled $237.5million for the nine months ended September 30, 2022 as compared with $143.8 million for the same period in 2021 due to higher tons sold, higher sales-related costs directly associated with higher revenue per ton sold in 2022 and inflationary pressures on overall costs. The cash cost per ton sold (FOB mine) for the first nine months of 2022 was $106, compared with $68 in the same period in 2021.

Asset retirement obligation accretion. Asset retirement obligation accretion was $1.5 million for the nine months ended September 30, 2022 and $0.5 million for the nine months ended September 30, 2021. The higher level of accretion in 2022 was driven primarily by asset retirement obligations assumed as part of the acquisition of Amonate assets in December 2021.

Depreciation and amortization. Depreciation and amortization expense was $29.9 million and $18.9 million for the nine-month periods ended September 30, 2022 and September 30, 2021, respectively, principally due to higher production volumes in the first nine months of 2022 and depreciation on capital equipment placed in service.

Selling, general and administrative. Selling, general and administrative expenses were $29.3million for the nine months ended September 30, 2022 and $15.8 million for the nine months ended September 30, 2021 primarily due to higher stock compensation, incentives and professional services in 2022, related to the Company’s production growth profile.

Other income (expense), net. Other income, net was $1.8 million for the nine months ended September 30, 2022 due to a gain of $2.1 million on the sale of mineral rights. For the nine months ended September 30, 2021, other income, net was $7.2 million principally due to the recognition of $5.4 million for the CARES Act Employee Retention Tax Credit.

Interest expense, net. Interest expense, net was approximately $5.3 million in the nine-month period ended September 30, 2022 and $1.4 million for the same period in 2021. Interest expense, net was higher from the prior period

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primarily due to the issuance of the Senior Notes in July ~~2021.~~2021 as well as debt incurred in the acquisition of Ramaco Coal in the second quarter of 2022.

Income tax expense. The effective tax rate for the nine months ended September 30, 2022 and 2021, excluding discrete items, was 21.9% and 13% respectively. During the ~~three~~nine months ended September 30, 2021, we recognized a tax benefit of ~~$0.2~~$1.6 million for legislative changes in West Virginia and ~~West Virginia . The effective tax rate for the three months ended September 30, 2021, excluding~~Virginia. We also reported discrete items ~~was 21%. The effective tax rate for~~related to stock-based compensation in the ~~three months ended September 30, 2020, excluding~~

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~~discrete items, was 23%.~~2022 and 2021 periods. The primary difference from the federal statutory rate of 21% is related to state taxes, permanent differences for non-deductible expenses and the difference in depletion expense between U.S. GAAP and federal income tax purposes.

~~Cash taxes paid for 2021 are expected to be less than $25 thousand.~~

~~Nine Months Ended~~ ~~September 30, 2021~~ ~~Compared to Nine Months Ended~~ ~~September 30, 2020~~

~~Revenue~~~~. Coal sales information is summarized as follows:~~

Nine months ended September 30,
(In thousands)

2021

2020

Increase (Decrease)
Company Produced






Coal sales revenue

$
190,211

$
117,769

$
72,442
Tons sold

1,707

1,208

499
Purchased from Third Parties






Coal sales revenue

$
5,678

$
—

$
5,678
Tons sold

44

—

44

Coal sales revenue in the nine months ended September 30, 2021 was $195.9 million, 66% higher than in the same period of 2020 primarily due to increased tons sold in the third quarter of 2021 and increased revenues per ton sold (FOB mine). Revenue per ton sold (FOB mine) increased 13% from $87/ton in the nine months ended September 30, 2020 to $98/ton in the same period of 2021. We sold 1.8 million tons of coal in the nine month period ended September 30, 2021, a 45% increase over the same period of 2020.

~~Cost of sales.~~ ~~Our cost of sales totaled $143.8~~million for the nine months ended September 30, 2021 as compared with $96.8 million for the same period in 2020 due to significantly higher tons sold. The cash cost per ton sold (FOB mine) for the first nine months of 2021 was $68/ton, compared with $70/ton in the same period of 2020. Improvement in our cash cost per ton sold in the nine months ended September 30, 2021 was primarily due to higher production volumes which better leveraged our fixed costs. Our cash cost per ton sold (FOB mine) of company produced tons for the nine months ended September 30, 2021 was $67/ton, compared with $70/ton in the nine months ended September 30, 2020.

~~Asset retirement obligation accretion.~~ ~~Asset retirement obligation accretion was $0.5 million for the nine months ended September 30, 2021 and $0.4 million for the nine months ended September 30, 2020.~~

~~Depreciation and amortization.~~ Depreciation and amortization expense was $18.9 million and $15.6 million for the periods ended September 30, 2021 and September 30, 2020, respectively, primarily due to higher production volumes in the first nine months of 2021 and depreciation on capital equipment placed in service.

~~Selling, general and administrative.~~ ~~Selling, general and administrative expenses were $15.8million for the nine months ended September 30, 2021 and $15.7 million for the nine months ended September 30, 2020.~~

~~Other income.~~ Other income was $7.2 million for the nine months ended September 30, 2021 primarily due to the recognition of $5.4 million for the CARES Act Employee Retention Tax Credit. For the nine months ended September 30, 2020, other income was $11.5 million, which includes recognition of $8.4 million for the anticipated forgiveness of the PPP Loan.

~~Interest expense, net.~~ ~~Interest expense, net was approximately $1.4 million in the nine month period ended September 30, 2021 and $0.9 million for the same period in 2020.~~

~~Income tax expense.~~ During the nine months ended September 30, 2021, we recognized a tax benefit of $1.6 million for legislative changes in Virginia and West Virginia and tax expense of $0.2 million for the excess of book expense over the tax deduction for vested restricted stock awards. The effective tax rate for the nine months ended September 30,

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2021, excluding discrete items, was 13% as compared with 19% in the comparable period of 2020. The primary difference from the federal statutory rate of 21% is related to state taxes, permanent differences for non-deductible expenses and the difference in depletion expense between U.S. GAAP and federal income tax purposes.

~~Cash taxes paid for 2021 are expected to be less than $25 thousand.~~

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Liquidity and Capital Resources

At September 30, ~~2021,~~2022, we had ~~$46.7~~$46.6 million of cash and cash equivalents and ~~$27.1~~$22.6 million available under our existing credit agreements for future borrowings.

Significant sources and uses of cash during the first nine months of ~~2021~~2022

Sources of cash:

●

Cash flows from operating activities were ~~$37.8~~$158.8 million. This included athe negative impact ~~from the primary components~~ of ~~our working capital (accounts receivables, inventories and accounts payable) of a net $11.7 million, primarily associated with an increase of accounts receivable and accounts payable, and~~ an increase in inventories of $24.2 million, primarily due to rail-related constraints, offset by an increase in accrued expenses of $26.1 million, principally due to accrued purchases, income taxes and payroll and related items.

●

We borrowed approximately $17.0 million for management of our ~~inventories.~~normal operating cash position.

Uses of cash:

●

Capital expenditures were ~~$17.6~~$91.4 million, which were primarily for ~~development of~~growth projects at the Berwind ~~mining complex~~ and ~~the Big Creek surface mine and for infrastructure at our~~ Elk Creek mining ~~complex.~~complexes, excluding the acquisition of the Ramaco Coal and Maben Coal assets.

●

We made ~~net borrowings~~repayments of ~~$23.3~~$21.1 million primarily ~~due to~~for the ~~closing of our senior unsecured notes in early July 2021~~Ramaco Coal acquisition note, equipment financing, and management of our normal operating cash position.

●

We paid dividends of $15.0 million.

●

We paid $11.7 million for the acquisition of Ramaco Coal, including transaction costs. Refer to Note 12 of Part I, Item 1 for additional information.

●

We paid $10.7 million for the acquisition of Maben Coal, including transaction costs. Refer to Note 12 of Part I, Item 1 for additional information.

At September 30, ~~2021,~~2022, we also had ~~$1.0~~$1.3 million of restricted cash, ~~balances,~~ classified in other current assets in the condensed consolidated balance ~~sheets,~~sheet, for potential future workers’ compensation claims.

Future sources and uses of cash

Our primary use of cash includes capital expenditures for mine development, ~~and for~~ ongoing operating ~~expenses.~~expenses and deferred cash payments in connection with the Ramaco Coal and Maben Coal acquisitions. We expect to fund our capital and liquidity requirements with cash on hand, anticipated cash flows from operations and borrowings discussed in more detail below. We believe that current cash on hand, cash flow from operations and available liquidity under our existing credit agreements will be sufficient to meet our capital expenditure and operating plans.

Additional factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program include:

●

Timely delivery of our product by rail and other transportation carriers;

●

Late payments of accounts receivable by our customers;

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●

Cost overruns in our purchases of equipment needed to complete our mine development plans;

●

Delays in completion of development of our various mines, processing plants and refuse disposal facilities, which would reduce the coal we would have available to sell and our cash flow from operations; and

●

Adverse changes in the metallurgical coal markets that would reduce the expected cash flow from operations.

If future cash flows are insufficient to meet our liquidity needs or capital requirements, we may reduce our expected level of capital expenditures and/or fund a portion of our capital expenditures through the issuance of debt or equity securities, the entry into debt arrangements or from other sources, such as asset sales.

Indebtedness

Refer to Note 4 of Part I, Item 1 for information regarding the Company’s indebtedness. During October 2022, the Company repaid its $17.0 million borrowing under the Revolving Credit ~~Facility and Term Loan—On November 2, 2018,~~Facility. No other material changes occurred to the Company’s indebtedness after September 30, 2022.

Critical Accounting Estimates

A discussion of our critical accounting policies is included in the Annual Report. There were no material changes to our critical accounting policies during the nine months ended September 30, 2022.

Off-Balance Sheet Arrangements

At September 30, 2022, we ~~entered into the Credit Agreement with KeyBank. The~~ had no material off-balance sheet arrangements.

~~Credit~~ ~~Agreement was amended on February 20, 2020 and on March 19, 2021, and consists of Term Loan~~

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and the Revolving Credit Facility. All personal property assets, including, but not limited to accounts receivable, coal inventory and certain mining equipment are pledged to secure the Credit Agreement.

~~The Revolving Credit Facility has a maturity date of December 31, 2023 and bears interest based on LIBOR + 2.0% or Base~~ ~~Rate~~ + 1.5%. Base Rate is the highest of (i) KeyBank’s prime rate, (ii) Federal Funds Effective Rate + 0.5%, or (iii) LIBOR + 2.0%. Advances under the Revolving Credit Facility are made initially as base rate loans but may be converted to LIBOR rate loans at certain times at our discretion. At September 30, 2021, there was no amount outstanding under the Revolving Credit Facility and we had remaining availability of $27.1 million.

The Term Loan is secured under a Master Security Agreement with a pledge of certain underground and surface mining equipment, bears interest at LIBOR + 5.15% and is required to be repaid in monthly installments of $278 thousand ~~including accrued interest. The outstanding principal balance under the Term Loan was $4.2 million at~~ ~~September 30, 2021~~.

~~The Credit Agreement contains usual and customary covenants including limitations on liens, additional indebtedness, investments~~, restricted payments, asset sales, mergers, affiliate transactions and other customary limitations, as well as financial covenants. At September 30, 2021, we were in compliance with all debt covenants under the Credit Agreement.

~~Key Equipment Finance Loan—~~On April 16, 2020, we entered into an equipment loan with Key Equipment Finance, a division of KeyBank, as lender, in the principal amount of approximately $4.7 million for the financing of existing underground and surface equipment (the “Equipment Loan”). The Equipment Loan bears interest at 7.45% per annum and is payable in 36 monthly installments of $147 thousand. There is a 3% premium for prepayment of the note within the first 12 months. This premium declines by 1% during each successive 12-month period. The outstanding principal balance under the Equipment Loan was $2.6 million at September 30, 2021.

~~9.00% Senior Unsecured Notes due 2026~~—On July 13, 2021, we completed an offering of $34.5 million, in the aggregate, of the Company’s 9.00% Senior Unsecured Notes due 2026 (the “Notes”), less $2.4 million for note offering costs. The Notes mature on July 30, 2026, unless redeemed prior to maturity. The Notes bear interest at a rate of 9.00% per annum, payable quarterly in arrears on the 30th day of January, April, July and October of each year, commencing on July 30, 2021. We may redeem the Notes in whole or in part, at our option, at any time on or after July 30, 2023, or upon certain change of control events, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to, but not including, the date of redemption ~~The outstanding principal balance under the~~ ~~Notes~~ ~~was $34.5 million at September 30, 2021.~~

~~J. H. Fletcher & Co. Loan—~~On July 23, 2021, we entered into an equipment loan with J. H. Fletcher & Co., as lender, in the principal amount of approximately $1.0 million for the financing of underground equipment (the “Fletcher Equipment Loan”). The Fletcher Equipment Loan bears interest at 0% per annum and is payable in 24 monthly installments of $40 thousand. The outstanding principal balance under the Fletcher Equipment Loan was approximately $0.8 million at September 30, 2021.

~~Komatsu Financial Limited Partnership Loan—~~On August 16, 2021, we entered into an equipment loan with Komatsu Financial Limited Partnership, as lender, in the principal amount of approximately $1.0 million for the financing of surface equipment (the “Komatsu Equipment Loan”). The Komatsu Equipment Loan bears interest at 4.6% per annum and is payable in 36 monthly installments of $36 thousand for the first six months and then at $28 thousand until maturity. The outstanding principal balance under the Komatsu Equipment Loan was approximately $1.0 million at September 30, 2021.

~~SBA Paycheck Protection Program Loan—~~ On April 20, 2020, we received proceeds from the PPP Loan in the amount of approximately $8.4 million from KeyBank, as lender, pursuant to the PPP of the CARES Act. The purpose of the PPP is to encourage the continued employment of workers. We used all of the PPP Loan proceeds for eligible payroll expenses, lease, interest and utility payments.

~~On July 29, 2021, we were notified by KeyBank that full forgiveness had been approved by the SBA.~~

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~~Off-Balance Sheet Arrangements~~

~~At September 30, 2021, we had no material off-balance sheet arrangements.~~

Non-GAAP Financial Measures

Adjusted EBITDA - Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance.

We define Adjusted EBITDA as net income plus net interest expense, stock-based compensation, depreciation and amortization expenses, income taxes, certain non-operating expenses (charitable contributions), and ~~any transaction related costs.~~accretion of asset retirement obligations. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as an alternative to ~~U.S.~~ GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.


	Three months ended September 30,				Nine months ended September 30,				Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020		2022		2021		2022		2021
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net income (loss)	$	7,035	$	(4,776)	$	21,120	$	(162)
Reconciliation of Net Income to Adjusted EBITDA
Net income									$	26,905	$	7,035	$	101,656	$	21,120
Depreciation and amortization		6,751		5,258		18,861		15,601		11,435		6,751		29,898		18,861
Interest expense, net		933		344		1,418		915		2,255		933		5,323		1,418
Income tax expense (benefit)		1,588		(1,407)		1,650		(38)		6,596		1,588		27,068		1,650
EBITDA		16,307		(581)		43,049		16,316		47,191		16,307		163,945		43,049
Stock-based compensation		1,342		1,090		3,919		3,119		2,019		1,342		6,192		3,919
Other non-operating expenses										1,000		—		1,000		—
Accretion of asset retirement obligation		156		128		461		428		495		156		1,485		461
Adjusted EBITDA	$	17,805	$	637	$	47,429	$	19,863	$	50,705	$	17,805	$	172,622	$	47,429

Non-GAAP revenue per ton - Non-GAAP revenue per ton (FOB mine) is calculated as coal sales revenue less transportation costs, divided by tons sold. We believe revenue per ton (FOB mine) provides useful information to investors as it enables investors to compare revenue per ton we generate against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal prices from period to period excluding the impact of transportation costs which are beyond our control. The adjustments made to arrive at these measures are significant in understanding and assessing our financial ~~condition.~~performance. Revenue per ton sold (FOB mine) is not a measure of financial performance in accordance with ~~U.S.~~ GAAP and therefore should not be considered as an alternative to revenue under ~~U.S.~~ GAAP.

Three months ended September 30, 2021

Three months ended September 30, 2020

Company

Purchased

Company

Purchased

(In thousands, except per ton amounts)

Produced

Coal

Total

Produced

Coal

Total

Revenue

$
75,207

$
1,170

$
76,377

$
39,459

$
—

$
39,459
Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)

Transportation costs

(8,549)

(209)

(8,758)

(6,051)

—

(6,051)
Non-GAAP revenue (FOB mine)

$
66,658

$
961

$
67,619

$
33,408

$
—

$
33,408
Tons sold

637

7

644

430

—

430
Revenue per ton sold (FOB mine)

$
105

$
138

$
105

$
78

$
—

$
78


	Three months ended September 30, 2022						Three months ended September 30, 2021
	Company		Purchased				Company		Purchased
(In thousands, except per ton amounts)	Produced		Coal		Total		Produced		Coal		Total

Revenue	$	135,416	$	1,509	$	136,925	$	75,207	$	1,170	$	76,377
Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)
Transportation costs		(14,158)		—		(14,158)		(8,549)		(209)		(8,758)
Non-GAAP revenue (FOB mine)	$	121,258	$	1,509	$	122,767	$	66,658	$	961	$	67,619
Tons sold		602		7		608		637		7		644
Revenue per ton sold (FOB mine)	$	202	$	231	$	202	$	105	$	138	$	105

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	Nine months ended September 30, 2021						Nine months ended September 30, 2020						Nine months ended September 30, 2022						Nine months ended September 30, 2021
	Company		Purchased				Company		Purchased				Company		Purchased				Company		Purchased
(In thousands, except per ton amounts)	Produced		Coal		Total		Produced		Coal		Total		Produced		Coal		Total		Produced		Coal		Total

Revenue	$	190,211	$	5,678	$	195,889	$	117,769	$	—	$	117,769	$	424,058	$	6,403	$	430,461	$	190,211	$	5,678	$	195,889
Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)
Transportation costs		(23,624)		(1,180)		(24,804)		(12,611)		—		(12,611)		(44,749)		(239)		(44,988)		(23,624)		(1,180)		(24,804)
Non-GAAP revenue (FOB mine)	$	166,587	$	4,498	$	171,085	$	105,158	$	—	$	105,158	$	379,309	$	6,164	$	385,473	$	166,587	$	4,498	$	171,085
Tons sold		1,707		44		1,751		1,208		—		1,208		1,753		22		1,775		1,707		44		1,751
Revenue per ton sold (FOB mine)	$	98	$	103	$	98	$	87	$	—	$	87	$	216	$	279	$	217	$	98	$	103	$	98

Non-GAAP cash cost per ton sold - Non-GAAP cash cost per ton sold is calculated as cash cost of sales less transportation costs and idle mine costs, divided by tons sold. We believe cash cost per ton sold provides useful information to investors as it enables investors to compare our cash cost per ton against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal cost from period to period excluding the impact of transportation costs which are beyond our control. The adjustments made to arrive at these measures are significant in understanding and assessing our financial ~~condition.~~performance. Cash cost per ton sold is not a measure of financial performance in accordance with ~~U.S.~~ GAAP and therefore should not be considered as an alternative to cost of sales under ~~U.S.~~ GAAP.


	Three months ended September 30, 2021						Three months ended September 30, 2020						Three months ended September 30, 2022						Three months ended September 30, 2021
	Company		Purchased				Company		Purchased				Company		Purchased				Company		Purchased
(In thousands, except per ton amounts)	Produced		Coal		Total		Produced		Coal		Total		Produced		Coal		Total		Produced		Coal		Total

Cost of sales	$	53,928	$	880	$	54,808	$	35,689	$	—	$	35,689	$	78,818	$	816	$	79,634	$	53,928	$	880	$	54,808
Less: Adjustments to reconcile to Non-GAAP cash cost of sales
Transportation costs		(8,548)		(210)		(8,758)		(6,031)		—		(6,031)		(14,156)		—		(14,156)		(8,548)		(210)		(8,758)
Idle mine costs														(5,037)		—		(5,037)		—		—		—
Non-GAAP cash cost of sales	$	45,380	$	670	$	46,050	$	29,658	$	—	$	29,658	$	59,625	$	816	$	60,441	$	45,380	$	670	$	46,050
Tons sold		637		7		644		430		—		430		602		7		608		637		7		644
Cash cost per ton sold	$	71	$	97	$	72	$	69	$	—	$	69	$	99	$	125	$	99	$	71	$	97	$	72


	Nine months ended September 30, 2021						Nine months ended September 30, 2020						Nine months ended September 30, 2022						Nine months ended September 30, 2021
	Company		Purchased				Company		Purchased				Company		Purchased				Company		Purchased
(In thousands, except per ton amounts)	Produced		Coal		Total		Produced		Coal		Total		Produced		Coal		Total		Produced		Coal		Total

Cost of sales	$	138,863	$	4,905	$	143,768	$	96,758	$	—	$	96,758	$	232,536	$	4,994	$	237,530	$	138,863	$	4,905	$	143,768
Less: Adjustments to reconcile to Non-GAAP cash cost of sales
Transportation costs		(23,625)		(1,179)		(24,804)		(12,338)		—		(12,338)		(44,749)		(239)		(44,988)		(23,625)		(1,179)		(24,804)
Idle mine costs														(5,037)		—		(5,037)		—		—		—
Non-GAAP cash cost of sales	$	115,238	$	3,726	$	118,964	$	84,420	$	—	$	84,420	$	182,750	$	4,755	$	187,505	$	115,238	$	3,726	$	118,964
Tons sold		1,707		44		1,751		1,208		—		1,208		1,753		22		1,775		1,707		44		1,751
Cash cost per ton sold	$	67	$	85	$	68	$	70	$	—	$	70	$	104	$	215	$	106	$	67	$	85	$	68

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Quantitative and qualitative disclosures about market risk are included in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” of our Annual Report.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report, at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no significant changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Disclosure Controls and Procedures

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

~~There were no significant changes in~~Our senior members of management do not expect that our ~~system of~~disclosure controls and procedures or our internal control over financial reporting ~~(as defined in Rule 13a-15(f) under~~will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the ~~Exchange Act) during~~objectives of the ~~quarter ended September 30, 2021, that have materially affected, or~~control system are ~~reasonably likely to materially affect, our~~met. Because of its inherent limitations, internal control over financial ~~reporting.~~reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Table of Contents~~

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Due to the nature of our business, we may become, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities. While the outcome of these proceedings cannot be predicted with certainty, in the opinion of our management, there are no pending litigation, disputes or claims against us which, if decided adversely, individually or in the aggregate, will have a material adverse effect on our financial condition, cash flows or results of operations. For a description of our legal proceedings, see Note 87 to the Condensed Consolidated Financial Statements included in Part I of this Quarterly Report.

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Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our Annual Report and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our business, financial condition, cash flows or future results of operations.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual ~~Report.~~Report and our Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 9, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Quarterly Report.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits



~~4.1~~2.1	~~Indenture~~Securities Purchase Agreement, dated as of ~~July 13, 2021,~~August 8, 2022, between Ramaco ~~Resources, Inc.~~Development, LLC and ~~Wilmington Savings Fund Society, FSB, as trustee~~Appleton Coal LLC (incorporated by reference to Exhibit ~~4.1 of~~10.1 to the ~~Company’s~~Current Report on Form 8-K (File No. 001-38003) filed with the SEC on ~~July 13, 2021).~~August 8, 2022)

~~4.2~~+10.1	~~First Supplemental Indenture~~Loan Agreement, dated as of ~~July 13, 2021,~~September 23, 2022, between Ramaco ~~Resources, Inc.~~Development, LLC and ~~Wilmington Savings Fund Society, FSB, as trustee~~Investec Bank PLC (incorporated by reference to Exhibit ~~4.2 of~~10.2 to the Company’s Current Report on Form 8-K (File No. 001-38003) filed with the SEC on ~~July 13, 2021).~~September 26, 2022)

~~4.3~~*+10.2	~~Form of 9.00% Senior Note due 2026 (incorporated~~Second Amendment to Amended and Restated Credit and Security Agreement, dated September 23, 2022, by ~~reference to Exhibit 4.2.1 of the Company’s Form 8-K filed on July 13, 2021).~~and among Ramaco Resources, Inc., Ramaco Development, LLC, Ram Mining, LLC, Ramaco Coal Sales, LLC, Ramaco Resources, LLC, Ramaco Resources Land Holdings, LLC and KeyBank National Association

*31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

**32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

**32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*95.1	Mine Safety Disclosure

*101.INS	Inline XBRL Instance Document

*101.SCH	XBRL Taxonomy Extension Schema Document

*101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

*101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

*101.LAB	XBRL Taxonomy Extension Labels Linkbase Document

*101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Exhibit filed herewith.

** Furnished herewith. Pursuant to SEC Release No. 33-8212, this certification will be treated as “accompanying” this Quarterly Report and not “filed” as part of such report for purposes of Section 18 of the Exchange Act or otherwise subject to the liability under Section 18 of the Exchange Act, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act, except to the extent that the registrant specifically incorporates it by reference.

+	Certain schedules and similar attachments have been omitted in reliance on Item 601(a)(5) of Regulation S-K. The Company will provide, on a supplemental basis, a copy of any omitted schedule or attachment to the SEC or its staff upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	RAMACO RESOURCES, INC.


November ~~2, 2021~~9, 2022	By:	/s/ Randall W. Atkins
		Randall W. Atkins
		Chairman, Chief Executive Officer and Director
		(Principal Executive Officer)


November ~~2, 2021~~9, 2022	By:	/s/ Jeremy R. Sussman
		Jeremy R. Sussman
		Chief Financial Officer
		(Principal Financial Officer)

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		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1720
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2628
Item 4.	Controls and Procedures	2628

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	2728
Item 1A.	Risk Factors	2729
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	2729
Item 5.	Other Information	29
Item 6.	Exhibits	2830

SIGNATURES		2931


	September 30, 2021
(In thousands)	Financing		Operating		Total

Future minimum lease payments:
2021	$	731	$	16	$	747
2022		3,510		41		3,551
2023		3,173		—		3,173
2024		945		—		945
Total undiscounted lease payments		8,359		57		8,416
Less: Amounts representing interest		(455)		(13)		(468)
Present value of lease obligations	$	7,904	$	44	$	7,948

Weighted average remaining term (years)		2.6		0.6
Weighted average discount rate		4.1%		8.5%