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, 2022~~March 31, 2023


☐	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~~1900
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 7, 2022,~~April 30, 2023, the registrant had ~~44,121,702~~44,414,085 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 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, ~~2021~~2022 (the “Annual Report”) filed with the United States Securities and Exchange Commission (the “SEC”) on March 14, 2023 and amended on April ~~1, 2022 and~~7, 2023, as well as other filings of the Company with the SEC.

Forward-looking statements may include statements about:

●

risks related to the impact of the 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;~~industries;

●

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;

●

the anticipated benefits and impacts of previous acquisitions;

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●

risks related to Russia’s invasion of Ukraine and the ~~anticipated benefits and impacts of the Ramaco Coal, LLC (“Ramaco Coal”) and Maben acquisitions;~~international community’s response;

●

risks related to ~~Russia’s recent invasion~~the long-term impacts of ~~Ukraine and~~ the ~~international community’s response;~~COVID-19 global pandemic;

●

risks related to weakened global economic conditions and 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 information	September 30, 2022		December 31, 2021		March 31, 2023		December 31, 2022

Assets
Current assets
Cash and cash equivalents	$	46,608	$	21,891	$	36,616	$	35,613
Accounts receivable		50,358		44,453		71,099		41,174
Inventories		40,028		15,791		50,971		44,973
Prepaid expenses and other		4,962		4,626		19,005		25,729
Total current assets		141,956		86,761		177,691		147,489
Property, plant and equipment, net		403,130		227,077
Property, plant, and equipment, net						444,075		429,842
Financing lease right-of-use assets, net		9,839		9,128		12,443		12,905
Advanced coal royalties		3,618		5,576		3,277		3,271
Other		3,589		491		3,830		2,832
Total Assets	$	562,132	$	329,033	$	641,316	$	596,339
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable	$	30,130	$	15,346	$	49,850	$	34,825
Accrued expenses		49,209		19,410
Asset retirement obligations		484		489
Accrued liabilities						33,070		41,806
Current portion of asset retirement obligations						29		29
Current portion of long-term debt		30,839		7,674		29,684		35,639
Current portion of related party debt		35,000		—		30,000		40,000
Current portion of financing lease obligations		4,776		3,461		6,114		5,969
Other current liabilities		—		280
Insurance financing liability						2,415		4,577
Total current liabilities		150,438		46,660		151,162		162,845
Asset retirement obligations		28,339		22,060
Asset retirement obligations, net						29,206		28,856
Long-term debt, net		16,838		3,339		45,567		18,757
Long-term related party debt		10,000		—
Long-term financing lease obligations, net		3,783		4,599		3,980		4,917
Senior notes, net		32,712		32,363		32,945		32,830
Deferred tax liability, net		17,985		6,406		37,791		35,637
Other long-term liabilities		3,368		2,532		3,742		3,299
Total liabilities		263,463		117,959		304,393		287,141
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, 44,121,702 at September 30, 2022 and 44,092,981 at December 31, 2021 shares issued and outstanding		441		441
Common stock, $0.01 par value, 260,000,000 shares authorized, 44,418,879 at March 31, 2023 and 44,155,735 at December 31, 2022 shares issued and outstanding						444		442
Additional paid-in capital		166,994		163,566		171,531		168,711
Retained earnings		131,234		47,067		164,948		140,045
Total stockholders' equity		298,669		211,074		336,923		309,198
Total Liabilities and Stockholders' Equity	$	562,132	$	329,033	$	641,316	$	596,339

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 March 31,
In thousands, except per-share amounts	2022		2021		2022		2021		2023		2022

Revenue	$	136,925	$	76,377	$	430,461	$	195,889	$	166,360	$	154,882

Costs and expenses
Cost of sales (exclusive of items shown separately below)		79,634		54,808		237,530		143,768		110,549		81,253
Asset retirement obligations accretion		495		156		1,485		461		350		235
Depreciation and amortization		11,435		6,751		29,898		18,861
Selling, general and administrative		8,672		5,895		29,282		15,767
Depreciation, depletion, and amortization										11,852		8,680
Selling, general, and administrative										11,742		11,824
Total costs and expenses		100,236		67,610		298,195		178,857		134,493		101,992

Operating income		36,689		8,767		132,266		17,032		31,867		52,890

Other income (expense), net		(933)		789		1,781		7,156
Other income, net										1,247		366
Interest expense, net		(2,255)		(933)		(5,323)		(1,418)		(2,309)		(1,130)

Income before tax		33,501		8,623		128,724		22,770		30,805		52,126
Income tax expense		6,596		1,588		27,068		1,650		5,548		10,655
Net income	$	26,905	$	7,035	$	101,656	$	21,120	$	25,257	$	41,471

Earnings per common share
Basic	$	0.61	$	0.16	$	2.30	$	0.48	$	0.57	$	0.94
Diluted	$	0.60	$	0.16	$	2.27	$	0.48	$	0.57	$	0.92

Basic weighted average shares outstanding		44,085		44,109		44,179		43,915		44,281		44,181
Diluted weighted average shares outstanding		44,543		44,465		44,747		43,996		44,692		44,908

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				Additional				Total
	Common		Paid-		Retained		Stockholders'		Common		Paid-		Retained		Stockholders'
In thousands	Stock		in Capital		Earnings		Equity		Stock		in Capital		Earnings		Equity
Balance at January 1, 2023									$	442	$	168,711	$	140,045	$	309,198
Stock-based compensation										3		2,934		—		2,937
Restricted stock surrendered for withholding taxes payable										(1)		(114)		—		(115)
Adjustment to dividends previously declared										—		—		(354)		(354)
Net income										—		—		25,257		25,257
Balance at March 31, 2023									$	444	$	171,531	$	164,948	$	336,923

Balance at January 1, 2022	$	441	$	163,566	$	47,067	$	211,074	$	441	$	163,566	$	47,067	$	211,074
Stock-based compensation		2		1,885		—		1,887		2		1,885		—		1,887
Dividends declared		—		—		(2,497)		(2,497)		—		—		(2,497)		(2,497)
Net income		—		—		41,471		41,471		—		—		41,471		41,471
Balance at March 31, 2022		443		165,451		86,041		251,935	$	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,				Three months ended March 31,
In thousands	2022		2021		2023		2022
Cash flows from operating activities:
Net income	$	101,656	$	21,120	$	25,257	$	41,471
Adjustments to reconcile net income to net cash from operating activities:
Accretion of asset retirement obligations		1,485		461		350		235
Depreciation and amortization		29,898		18,861
Depreciation, depletion, and amortization						11,852		8,680
Amortization of debt issuance costs		367		96		149		121
Stock-based compensation		6,192		3,919		2,937		1,887
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		2,154		5,015
Changes in operating assets and liabilities:
Accounts receivable		(5,905)		(17,293)		(29,925)		(3,194)
Prepaid expenses and other current assets		1,242		5,611		4,779		1,807
Inventories		(24,237)		(1,933)		(5,998)		(3,752)
Other assets and liabilities		91		760		(823)		(591)
Accounts payable		12,432		7,515		13,902		18,653
Accrued expenses		26,112		2,397
Net cash from operating activities		158,799		37,757
Accrued liabilities						(3,272)		7,037
Net cash provided by operating activities						21,362		77,369

Cash flow from investing activities:
Capital expenditures		(91,384)		(17,642)		(23,546)		(19,742)
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)
Maben acquisition bond recovery						1,182		—
Net cash used for investing activities						(22,364)		(19,742)

Cash flows from financing activities:
Proceeds from borrowings		17,000		50,545		45,000		1,337
Proceeds from stock option exercises		107		—
Payments of debt issuance cost		—		(2,356)
Payment of dividends		(14,996)		—		(5,556)		(4,998)
Repayment of borrowings		(17,066)		(24,900)		(24,145)		(2,519)
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
Repayment of Ramaco Coal acquisition financing - related party						(10,000)		—
Repayments of insurance financing						(1,433)		(105)
Repayments of equipment finance leases						(1,746)		(1,635)
Shares surrendered for withholding taxes payable						(115)		—
Net cash provided by (used for) financing activities						2,005		(7,920)

Net change in cash and cash equivalents and restricted cash		25,096		40,962		1,003		49,707
Cash and cash equivalents and restricted cash, beginning of period		22,806		6,710		36,473		22,806
Cash and cash equivalents and restricted cash, end of period	$	47,902	$	47,672	$	37,476	$	72,513

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		954		3,624
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		—
Capital expenditures included in accounts payable and accrued liabilities						13,812		13,059
Financed insurance						407		—
Accrued dividends payable adjustment						322		—

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 AND BASIS OF PRESENTATION

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 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—~~~~COVID-19 continues to impact countries across the world, and the duration and severity~~ We also control mineral deposits near Sheridan, Wyoming as part of the ~~effects are currently unknown. We continue to actively monitor~~Company’s initiatives regarding the ~~situation~~potential recovery of rare earth elements as well as the potential commercialization of coal-to-carbon-based products 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.materials.

~~Russian/Ukraine Conflict—~~Economic Conditions—~~The extent and duration of~~Renewed global economic concerns, including those related to 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~~has had a significant effect on market prices and may affect overall demand for our coal ~~and~~as well as 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 on Form 10-K for the year ended December 31, ~~2021.~~2022.

In the opinion of ~~management,~~the Company, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary ~~to fairly present~~for a fair statement of the Company’s financial position as of ~~and~~March 31, 2023, as well as the results of operations and cash flows 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~~There were no material changes to the Company’s significant accounting policies during the first quarter of 2023.

NOTE 2—INVENTORIES
Inventories consisted of the following:

(In thousands)

March 31, 2023

December 31, 2022
Raw coal

$
32,449

$
22,414
Saleable coal

14,186

18,223
Supplies

4,336

4,336
Total inventories

$
50,971

$
44,973

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NOTE 3—PROPERTY, PLANT AND EQUIPMENT
Property, plant, and ~~Cash Equivalents~~equipment consisted of the following:

(In thousands)

March 31, 2023

December 31, 2022

Plant and equipment

$
243,421

$
232,885

Mining property and mineral rights

120,760

120,760

Construction in process

44,457

34,698

Capitalized mine development costs

157,345

153,436

Less: accumulated depreciation and amortization

(121,908)

(111,937)

Total property, plant and equipment, net

$
444,075

$
429,842

On July 10, 2022, the Company experienced a methane ignition at the Berwind No. 1 mine, which was one of the active mines at our Berwind mining complex. The other mines resumed production while the Berwind No. 1 mine was idled until a full investigation could be conducted. There were no personnel in the mine at the time of the incident and no injuries or fatalities occurred. Production from the Berwind No. 1 mine restarted in the first quarter of 2023.
Depreciation, depletion, and amortization included:

Three months ended March 31,

(In thousands)

2023

2022

Depreciation of plant and equipment

$
6,769

$
4,754

Amortization of right of use assets (finance leases)

1,881

714

Amortization and depletion of

capitalized mine development costs and mineral rights

3,202

3,212

Total depreciation, depletion, and amortization

$
11,852

$
8,680

NOTE 4—DEBT
Outstanding debt consisted of the following:

(In thousands)

March 31, 2023

December 31, 2022
Revolving Credit Facility

$
50,000

$
25,000
Equipment loans

6,651

8,396
Senior Notes, net

32,945

32,830
Financing of Ramaco Coal acquisition - Related party debt

30,000

40,000
Financing of Maben Coal acquisition

18,600

21,000
Total debt

$
138,196

$
127,226
Current portion of long-term debt

59,684

75,639
Long-term debt, net

$
78,512

$
51,587

Revolving Credit Facility—~~—We classify all highly liquid instruments~~On February 15, 2023, the Company entered into the Second Amended and Restated Credit and Security Agreement, which includes multiple lending parties and provides additional borrowing capacity compared to the facility utilized in 2022. The new facility, which has a maturity date of February 15, 2026, provides an initial aggregate revolving commitment of $125.0 million as well as an accordion feature of $50.0 million subject to certain terms and conditions, including the lenders’ consents. The Company utilized the new facility to pay down $10.0 million of related-party debt during the quarter associated with ~~an original maturity~~the 2022 acquisition of ~~three months or less to be cash equivalents. Restricted cash balances were $1.3~~Ramaco Coal. The remaining availability under the facility after borrowing base limitations and outstanding borrowings was $28.8 million at ~~September 30, 2022~~March 31, 2023.

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Revolving loans under the new facility bear interest at either the base rate plus 1.50% or the Secured Overnight Financing Rate plus 2.00%. The base rate equals the highest of the administrative agent’s prime rate, the Federal Funds Effective Rate plus 0.5%, or 3%.

The terms of the new facility include covenants limiting the ability of the Company to incur additional indebtedness, make investments or loans, incur liens, consummate mergers and ~~$0.9~~similar fundamental changes, make restricted payments, and enter into transactions with affiliates. The terms of the new facility also require the Company to maintain certain covenants, including fixed charge coverage ratio and compensating balance requirements, with which the Company was in compliance at March 31, 2023.

The Company’s Senior Notes had an estimated fair value of $36 million at both March 31, 2023 and December 31, 2022. The fair values of the Company’s Senior Notes were based on observable market prices and were considered a Level 2 measurement based on trading volumes. The difference between the fair value and carrying amount of the Company’s remaining debts is not material due to the similarity between the terms of the debt agreements and prevailing market terms available to the Company.

Finance lease obligations and liabilities related to insurance premium financing are excluded from the disclosures above.

NOTE 5—ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES

Accrued liabilities at March 31, 2023 consisted of accrued compensation and related benefits of $11.1 million, accrued purchases of $6.9 million, and various other liabilities. Accrued liabilities at December 31, ~~2021. These~~2022 consisted of ~~funds held~~accrued compensation and related benefits of $14.3 million, accrued purchases of $11.5 million, and various other liabilities. The decrease in ~~escrow for potential future workers’~~accrued compensation ~~claims~~ and ~~were classified~~related benefits was driven by the payment of annual bonuses earned and accrued in ~~other current assets~~2022. The decrease in accrued purchases was offset by the ~~consolidated balance sheets.~~increase in accounts payable during the first quarter of 2023.

Self-Insurance—We are self-insured for certain losses relating to workers’ compensation claims ~~including pneumoconiosis (occupational disease) claims.~~and occupational disease obligations under the Federal Mine Safety and Health Act of 1969, as amended. Starting in 2023, the Company also elected to self-insure employee medical expenses. 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, 2022, the estimated aggregate liability for uninsured claims totaled $4.2million. Of this, $2.7~~million is included in other long-term liabilities within the consolidated balance sheet at September 30, 2022. At December 31, 2021, the estimated aggregate liability for uninsured claims totaled $3.9~~million including $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.~~future cost trends. 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.~~

~~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, 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 64% of total revenue. During the nine months ended September 30, 2021, sales to our top three customers accounted for approximately 59% of total revenue.

~~Adoption of New Accounting Standards~~

InThe estimated aggregate liability for these items totaled $4.8 million and $3.6 million as of March 31, 2023 and December ~~2019,~~31, 2022, respectively. Of the ~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12,~~ ~~Income Taxes~~~~, which enhances~~aggregate liability, the amounts included in other long-term liabilities were $2.9 million and ~~simplifies various aspects~~$2.7 million as 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,~~March 31, 2023 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.December 31, 2022, respectively.

~~Recent Accounting Pronouncements Being Assessed~~

InFunds held in escrow for potential future workers’ compensation claims are considered restricted cash and have been included in other current assets on the condensed consolidated balance sheets. Restricted cash balances were $0.9 million at March ~~2020, the FASB issued ASU 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,~~ ~~which became effective immediately.~~The amendments in ASU 2020-04 provide optional relief regarding the accounting effects of reference rate reform, 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 expected to be discontinued as a result of reference rate reform initiatives. The Company has an outstanding term loan that references LIBOR; however, the debt is expected to be repaid in the near term31, 2023 and ~~therefore, a contract amendment to 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,
(In thousands)

2022

2021

2022

2021
Depreciation of plant and equipment

$
6,763

$
4,484

$
16,864

$
13,354
Depreciation of right of use assets (financing leases)

1,710

413

3,806

540
Amortization of capitalized

mine development costs

2,962

1,854

9,228

4,967
Total depreciation and amortization

$
11,435

$
6,751

$
29,898

$
18,861
2022.

NOTE ~~4—DEBT~~6—EQUITY

~~Revolving Credit Facility~~Stock-Based Compensation Awards—Stock-based compensation expense totaled $2.9 million and ~~Term Loan—On November 2, 2018, we entered into a Credit and Security Agreement (as amended or amended and restated~~$1.9 million for 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, 2020three months ended March 31, 2023 and March ~~19, 2021. On October 29, 2021, we entered into~~31, 2022, respectively. During the ~~Amended~~first quarter of 2023, the Company granted new stock-based awards and ~~Restated Credit~~modified certain awards previously granted as discussed below.

Restricted Stock—We granted 296,115 shares of restricted stock to certain senior executives, key employees, and ~~Security Agreement (the “Amendment and Restatement”) with KeyBank. Prior to~~directors during the ~~Amendment and Restatement, the Credit Agreement consisted~~first quarter of ~~the $10.0 million term loan (the “Term Loan”) and up to $30.0 million revolving line~~2023, having a grant-date fair value of ~~credit, including $3.0 million letter~~$10.61 per share. The aggregate fair value 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 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~~restricted stock granted to employees during the ~~Second Amendment to Amended and Restated Credit and Security Agreement with KeyBank to allow for the Maben Coal acquisition.~~

The Revolving Credit Facility bears interest based on Secure Overnight Financing Rate (“SOFR”) + 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) SOFR + 2.0%. Advances under the Revolving Credit Facility are made initiallyquarter was $2.5 million, which will be recognized ratably as Base Rate loans but may be converted to SOFR rate loans at certain times at our discretion. At September 30, 2022, there was a $17.0 million borrowing and a $0.4 million letter of credit outstanding under the Revolving Credit Facility, leaving $22.6 million of remaining 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 $0.8 million at September 30, 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, 2022, we were in compliance with all financial 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 $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 of the Equipment Loan was $1.0 million at September 30, 2022.

~~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 “Senior Notes”), 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. 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. 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 amortizedexpense over the ~~Senior Notes term using an effective rate method.~~three-year service period unless forfeited. The ~~outstanding principal balance under~~aggregate fair value of restricted stock granted to directors during the ~~Senior Notes was $34.5 million at September 30, 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 equipment loans with J. H. Fletcher & Co., as lender, in the principal amount of $0.9 million and $3.9 million, respectively, for the financing of underground equipment (the “Fletcher Equipment Loans”). The Fletcher Equipment Loans bear no interest and are payable in 24~~monthly 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 installments of $195 thousand. The outstanding principal balance of the 2021 and 2022 Fletcher Equipment Loans was $6.4 million at September 30, 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 $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 of the Komatsu Equipment Loan was $0.6 million, ~~at September 30, 2022.~~

~~Brandeis Machinery & Supply Company—~~~~On January 11, 2022, we entered into equipment loans with Brandeis Machinery & Supply Company,~~which will be recognized ratably 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 inexpense over 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. These leases are generally for terms up to 36 months and expire through 2025. We had one operating lease for office space that 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, 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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~~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.~~

As of September 30, 2022, we had four types of stock-based awards outstanding: options, restricted stock, restricted stock units and performance stock units. Stock-based compensation expense for all four types of stock-based awards totaled $2.0 million and $1.3 million for the three months ended September 30, 2022 and September 30, 2021, respectively. Stock-based compensation expense for all four types of stock-based awards totaled $6.2 million and $3.9 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.

~~The following table summarizes stock-based awards outstanding, as well as activity for 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 for $5.34 per share were granted to two 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 are outstanding and unexercised and were in-the-money at September 30, 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.~~forfeited. During the vesting period, the participants have voting rights and may receive dividends. Upon vesting, the 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. At September 30, 2022, there was $6.3 million of total unrecognized compensation cost related to unvested restricted stock to be recognized over a weighted-average period of 1.1~~years.~~

Restricted Stock Units—We ~~grant shares of~~granted 518,348 restricted stock units to certain senior executives and key ~~employees. These share units vest~~employees during the first quarter of 2023, having a grant-date fair value of $10.61 per share. The aggregate fair value of these awards was $5.5 million, which will be recognized ratably as expense over ~~approximately three years from~~ the ~~date of grant.~~three-year service period unless forfeited. 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.~~vest. Upon vesting and within 30 days thereafter, the recipient will receive one share of common stock for each stock unit.

The 248,706 restricted 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 2.3~~years.~~

Performance Stock Units—We ~~grant shares of~~granted performance stock units to certain senior executives and key employees. These ~~share units~~awards 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.~~vest. 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 granted during the quarter, or 518,348 units, were valued relative to the ~~stock price performance~~total shareholder return 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~~simulation, which resulted in a grant date fair value of $18.09 per unit. The aggregate fair value of these awards was $9.4 million, which will be recognized ratably as expense over the three-year period.

In addition, performance stock units granted in 2022, or 248,706 units at target, were modified during the first quarter of 2023. Modifications to these awards were made up primarily of changes in the composition of the peer group as well as changes in the way relative total shareholder return is evaluated against the updated peer group. The modification resulted in incremental fair value of $1.2 million to be recognized as expense over 2023 and 2024.

Dividends –On December 8, 2022, the Company announced that its Board of Directors declared a quarterly cash dividend of approximately $0.1250 per share of common stock. Estimated dividends of $5.5 million were accrued in December 2022 and were paidon March 15, 2023 to shareholders of record on March 1, 2023 in the amount of $5.6 million. Refer to Note 12 for information regarding dividends declared after 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 2.3financial statements.~~years.~~

~~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.

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 7—COMMITMENTS AND CONTINGENCIES

Environmental Liabilities—Environmental liabilities are recognized when the expenditures are considered probable and can be reasonably estimated. Measurement of liabilities is based on currently enacted laws and regulations, existing technology and undiscounted site-specific costs. Generally, such recognition would coincide with a commitment to a formal plan of action. No amounts have been recognized for environmental liabilities.

Surety ~~Bonds—~~Bond~~At September 30, 2022,~~—In accordance with state laws, we ~~had total~~are required to post reclamation ~~bonding requirements of $22.6 million which were supported by surety bonds. Additionally, we had $0.3 million~~bonds to assure that reclamation work is completed. We also have a smaller amount of surety bonds that ~~secured~~secure performance obligations. Bonds outstanding at March 31, 2023 totaled approximately $26.0 million.

Coal Leases and Associated Royalty Commitments—We lease coal reserves under agreements that require royalties to be paid as the coal is mined and sold. Many of these agreements require minimum annual royalties to be paid

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regardless of the amount of coal mined and sold. Total royalty expense was $9.0 million and $10.2 million for the three months ended March 31, 2023 and March 31, 2022, respectively. These agreements generally have terms running through exhaustion of all the mineable and merchantable coal covered by the respective lease. Royalties or throughput payments are based on a percentage of the gross selling price received for the coal we mine.

Contingent Transportation Purchase ~~Commitments—~~Commitments—We secure the ability to transport coal through rail contracts and export ~~terminal services contracts~~terminals that are sometimes funded through take-or-pay arrangements. ~~At September 30, 2022, contingent liabilities~~As of March 31, 2023, the Company’s remaining commitments under ~~these~~ take-or-pay arrangements totaled ~~$5.4~~$39.9 million, ~~under three contracts expiring at various dates between December 31, 2022, and March 31, 2024.~~the majority of which relates to a new five-year contract with a total commitment of $22.5 million. The level of these ~~take-or-pay liabilities~~commitments 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~~contract term stipulated in such rail and export terminal contracts. No amounts have been recognized as contingent liabilities related to take-or-pay arrangements.

~~Litigation—~~Litigation—From time to time, ~~the Company may be~~we are 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.

InOn 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 our 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, intherefore, on August 21, 2019, we filed ~~suit.~~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 to require 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. The ~~case went to~~ trial in the matter commenced on June 29, 2021, ~~and~~ in Charleston, West Virginia. On July 15, 2021, the jury returned a verdict in our favor for $7.7 million in compensatory damages and on July 16, 2021, made an additional award of $25.0 million for inconvenience and aggravation. InOn August 12, 2021, the defendants filed a post-trial ~~motion.~~motion for judgment as a matter of law or in the alternative to alter or amend the judgment or for a new trial. The parties fully briefed the motion, and it stood submitted on August 31, 2021. 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 currently reflected in the financial statements related to this matter.~~

On April 1, 2022, we filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit. The matter has been fully briefed by the parties, and the court heard oral argument on January 27, 2023. The matter is now pending before the court.

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NOTE 8—REVENUE

Our revenue is derived from contracts for the sale of coal and is recognized when the performance obligations under the contract are satisfied, 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 be either ~~be by fixed-price~~fixed 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 March 31,
(In thousands)	2022		2021		2022		2021		2023		2022
Coal Sales
North American revenue	$	78,442	$	47,954	$	231,365	$	105,611	$	40,027	$	60,094
Export revenue, excluding Canada		58,483		28,423		199,096		90,278		126,333		94,788
Total revenue	$	136,925	$	76,377	$	430,461	$	195,889	$	166,360	$	154,882

~~At September 30, 2022, we~~As of March 31, 2023, the Company had outstanding performance obligations ~~for the remainder of 2022~~ of approximately ~~0.5~~1.9 million tons for

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contracts with fixed sales prices averaging ~~$197/~~$197 per ton, excluding freight, which will generally be satisfied within the next year, 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 0.10.8 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.

Concentrations—During the three months ended March 31, 2023, sales to our top four customers accounted for approximately 63% of our total revenue. The balance due from these four customers at March 31, 2023 was approximately 61% of total accounts receivable. During the three months ended March 31, 2022, sales to our top four customers accounted for approximately 70% of total revenue. The number of customers comprising the concentrations above is based on a threshold of 10% or more of total revenues and related receivables.

NOTE 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 impacts of discrete items are recognized in the period these occur.

Our effective tax rate for the three months ended ~~September 30,~~March 31, 2023 and March 31, 2022 was 18.0% and ~~September 30, 2021 was 20% and 21%~~19.5%, 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 related to stock-based compensation in 2022 and 2021 periods. The primary difference from the federal statutory rate of 21% in each period is related to state taxes, ~~permanent differences for~~ non-deductible expenses, the foreign derived intangible income deduction, and depletion expense for income tax purposes.

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NOTE 10—EARNINGS 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 March 31,
(In thousands, except per share amounts)	2022		2021		2022		2021		2023		2022
Numerator
Net income	$	26,905	$	7,035	$	101,656	$	21,120	$	25,257	$	41,471
Denominator
Weighted average shares used to compute basic earnings per share		44,085		44,109		44,179		43,915		44,281		44,181
Dilutive effect of stock option awards		458		356		560		81		411		605
Dilutive effect of restricted stock units and performance stock units awards		—		—		8		—
Dilutive effect of restricted stock units										—		122
Weighted average shares used to compute diluted earnings per share		44,543		44,465		44,747		43,996		44,692		44,908

Earnings (loss) per share
Earnings per share
Basic	$	0.61	$	0.16	$	2.30	$	0.48	$	0.57	$	0.94
Diluted	$	0.60	$	0.16	$	2.27	$	0.48	$	0.57	$	0.92

Diluted earnings per share for the three months ended ~~September 30, 2022,~~March 31, 2023, excludes ~~249~~all outstanding restricted stock units (396 thousand ~~of RSUs~~units on a weighted average outstanding basis) because the effect would have been antidilutive. ~~Diluted~~In addition, diluted earnings per share for the three months ended ~~September 30,~~March 31, 2023 and March 31, 2022 ~~also excludes 249 thousand of~~exclude all performance stock units, as discussed earlier in Note 6. The performance stock units were excluded based on the guidance for contingently issuable shares, which requires exclusion when ~~based on current period results,~~ the shares would not be 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~~period, or, otherwise, the ~~nine months ended September 30,2022 as well.~~effect would have been antidilutive.

NOTE 11—RELATED PARTY TRANSACTIONS

Ramaco Coal Deferred Purchase Price—As part of the financing of the acquisition of Ramaco Coal that occurred in the second quarter of 2022, the Company incurred interest expense of $0.8 million for the three months ended March 31, 2023. The Company paid down $10.0 million of related-party debt during the first quarter of 2023, leaving a balance of $30.0 million.

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Mineral Lease and Surface Rights Agreements—Prior to the acquisition of Ramaco Coal, ~~LLC (“Ramaco Coal”), see Note 12,~~ much 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, who was a related party. ~~Production royalty payables totaling $0.4 million at December 31, 2021 were included in accounts payablein the consolidated balance sheet.~~ Royalties paid to Ramaco Coal ~~in 2022, prior to the acquisition, totaled $3.1 million. Royalties paid to Ramaco Coal in~~during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 totaled ~~$1.3 million and $3.9 million, respectively.~~$2.0 million.

Administrative Services—Also prior to the acquisition of Ramaco Coal, the Company and Ramaco Coal agreed to share the services of certain of each company’s employees pursuant to a Mutual Service Agreement, dated December 22, 2017 but effective as of March 31, 2017. Each party 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. Year-to-date charges to Ramaco Coal in 2022, prior to the acquisition, were $44 thousand. For the three and nine months ended September 30, 2021, chargesmutual service agreement. Charges to Ramaco Coal were ~~$40~~$23 thousand ~~and $79 thousand, respectively.~~for the three months ended March 31, 2022.

Legal Services—Some of the professional legal services we receive are provided by Jones & Associates (“Jones”), a related party. Legal services payable to Jones totaled $0.6 million at ~~September 30, 2022~~March 31, 2023 and were included in accrued ~~expenses~~liabilities in the consolidated balance sheet. There were no legal ~~services payable as of December 31, 2021. No legal services were paid to~~expenses recognized for Jones induring 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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~~Ramaco Foundation--~~The Company made a charitable cash contribution of $1.0 million in the 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 board of directors.March 31, 2023.

NOTE 12—~~ACQUISITIONS~~SUBSEQUENT EVENTS

~~Ramaco Coal~~On April 12, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.1250 per share of common stock to be paid on June 15, 2023 to shareholders of record on June 1, 2023.

On April ~~29, 2022,~~26, 2023, the ~~acquisition~~Company filed a definitive proxy statement regarding a special meeting of ~~Ramaco Coal,~~shareholders to be held on June 12, 2023. At the meeting, which will be held virtually, shareholders will be asked to vote for a charter amendment proposal to approve the adoption of an ~~entity owned by an investment fund managed by Yorktown Partners~~amendment and ~~certain members~~restatement of our amended and restated certificate of incorporation. Such amendment contemplates, among other things, (1) reclassifying our existing common stock as shares of Class A common stock, par value $0.01 per share, (2) creating a separate Class B common stock (a tracking stock), par value $0.01 per share, and (3) providing our board of directors the option, in its sole discretion, to exchange all outstanding shares of the ~~Company's management, was completed pursuant to a Purchase and Sale Agreement, dated February 23, 2022. The purchase price was approximately $65 million, consisting~~Class B common stock into shares of an initial payment of $10 million paid at closing and a deferred purchase price of $55 million 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 royaltyClass A common stock based on ~~the amount~~an exchange ratio determined by a 20-day trailing volume-weighted average price for each class 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 January 2024 until December 2028. The fair value of this arrangement was $3.7 million, of which, $1.6 million was treated as an allocation of the 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 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.stock.

* * * * *

1915

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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 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 3962 million reserve tons and ~~769~~1,156 million of measured and indicated resource tons of high-quality metallurgical coal. ~~We believe our advantaged reserve geology provides us with higher productivities and industry leading lower cash costs.~~

Our development portfolio primarily includes ~~four~~the following properties: Elk Creek, Berwind, Knox Creek and RAM Mine. ~~Each~~We believe each of these properties possesses geologic and logistical advantages that make our coal among the lowest delivered-cost U.S. metallurgical coal to our domestic target customer base, North American blast furnace steel mills and coke plants, as well as international metallurgical ~~and thermal~~ coal consumers. ~~In addition,~~We also control mineral deposits near Sheridan, Wyoming as part of the Company’s initiatives regarding the potential recovery of rare earth elements as well as the potential commercialization of coal-to-carbon-based products and materials.

On July 10, 2022, the Company ~~completed acquisitions~~experienced a methane ignition at the Berwind No. 1 mine, which was one of ~~Ramaco Coal and Maben Coal~~the active mines at our Berwind mining complex. The other mines resumed production while the Berwind No. 1 mine was idled until a full investigation could be conducted. There were no personnel in the ~~second~~mine at the time of the incident and ~~third quarters of 2022, respectively. With~~no injuries or fatalities occurred. Production from the ~~Ramaco Coal acquisition, we control coal deposits~~Berwind No. 1 mine restarted in ~~Wyoming along with facilities that house research and development activities. With the Maben Coal acquisition, the Company has obtained control of additional coal deposits in West Virginia.~~

~~During~~ the first ~~nine months~~quarter of ~~2022, we sold 1.8 million tons of coal. Of this, 54% was sold in North American markets,~~2023.

Renewed global economic concerns, including ~~Canada, and 46% was sold in export markets, principally~~those related to ~~Europe, South America, Asia and Africa. During the same period of 2021, 54% of our sales were sold in North American markets, with the remaining 46% being sold into the export markets.~~

At September 30, 2022, we had outstanding performance obligations for the remainder of 2022 of approximately 0.5 million tons for contracts with fixed sales prices averaging $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.

COVID-19 continues to impact countries across the world, and the duration and severity of the effects are 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.

~~Regarding~~ 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~~has had a significant effect on market prices and may affect overall demand for our coal as well as the cost of supplies and equipment.

During the first quarter of 2023, we sold 0.8 million tons of coal and recognized $166.4 million of revenue. Of this amount, 24% was sold in North American markets, including Canada, and 76% was sold into export markets. During the same period of 2022, we sold 0.6 million tons of coal and recognized $154.9 million of revenue. Of this amount, 39% of our sales were sold in North American markets, including Canada, with the remaining 61% being sold into the export markets.

As of March 31, 2023, the Company had outstanding performance obligations of approximately 1.9 million tons for contracts with fixed sales prices averaging $197 per ton, excluding freight, which will generally be satisfied within the next year, and 0.8 million tons for contracts with index-based pricing mechanisms.

2016

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~~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 July 10, 2022, we experienced a material methane ignition at our Berwind mining complex.~~ The ~~cause~~Company continues to assess its potential rare earth element deposit in Wyoming, and core analysis performed to date shows high relative concentrations of heavy rare earth elements such as Terbium and Dysprosium as well as lighter rare earth elements such as Neodymium and Praseodymium. Refer to the ~~ignition is presently unknown. We, in conjunction with the appropriate state~~Company’s Current Report on Form 8-K filed on May 3, 2023 for additional information. The exploration target does not represent, 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 hasshould 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 expectedbe construed to be, ~~impacted for an indeterminant period~~a mineral resource or mineral reserve as such terms are used in subpart 1300 of ~~time. We will provide additional information regarding plans for both the rehabilitation and restarting of the mine as it becomes available.~~Regulation S-K.

Results of Operations


	Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
(In thousands)	2022		2021		2022		2021
(In thousands, except per share amounts)									2023		2022

Revenue	$	136,925	$	76,377	$	430,461	$	195,889	$	166,360	$	154,882

Costs and expenses
Cost of sales (exclusive of items shown separately below)		79,634		54,808		237,530		143,768		110,549		81,253
Asset retirement obligations accretion		495		156		1,485		461		350		235
Depreciation and amortization		11,435		6,751		29,898		18,861
Selling, general and administrative		8,672		5,895		29,282		15,767
Depreciation, depletion, and amortization										11,852		8,680
Selling, general and administrative expenses										11,742		11,824
Total costs and expenses		100,236		67,610		298,195		178,857		134,493		101,992

Operating income		36,689		8,767		132,266		17,032		31,867		52,890

Other income (expense), net		(933)		789		1,781		7,156
Other income, net										1,247		366
Interest expense, net		(2,255)		(933)		(5,323)		(1,418)		(2,309)		(1,130)
Income before tax		33,501		8,623		128,724		22,770		30,805		52,126

Income tax expense		6,596		1,588		27,068		1,650		5,548		10,655

Net income	$	26,905	$	7,035	$	101,656	$	21,120	$	25,257	$	41,471

Earnings per common share
Basic	$	0.61	$	0.16	$	2.30	$	0.48	$	0.57	$	0.94
Diluted	$	0.60	$	0.16	$	2.27	$	0.48	$	0.57	$	0.92

Adjusted EBITDA	$	50,705	$	17,805	$	172,622	$	47,429	$	48,253	$	64,058

During the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, our net income and Adjusted EBITDA were ~~significantly higher~~lower compared to the same ~~periods~~period in ~~2021. Sales 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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largely due to lower margins on coal sales driven by the ~~global rebound~~negative impact of metallurgical demand from the previous effects of COVID-19. Other income for the nine months ended September 30, 2022 included $2.1 million related to the sale of mineral rights. In the nine months ended September 30, 2021, we recognized a total of $5.4 million in other income for the CARES Act Employee Retention Tax Credit.pricing.

Three Months Ended ~~September 30, 2022~~March 31, 2023 Compared to Three Months Ended ~~September 30, 2021~~March 31, 2022

Revenue. Our revenue includes sales 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~~

Table of ~~transportation billings and costs.~~Contents

Coal sales information is summarized as follows:


	Three months ended September 30,						Three months ended March 31,
(In thousands)	2022		2021		Increase (Decrease)		2023		2022		Increase (Decrease)
Company Produced
Coal sales revenue	$	135,416	$	75,207	$	60,209	$	158,959	$	150,929	$	8,030
Tons sold		602		637		(35)		727		573		154
Purchased from Third Parties
Coal sales revenue	$	1,509	$	1,170	$	339	$	7,401	$	3,953	$	3,448
Tons sold		7		7		(0)		29		10		19
Totals
Coal sales revenue							$	166,360	$	154,882	$	11,478
Tons sold								757		583		173

Coal sales revenue in the ~~third~~first quarter of 2023 was $166.4 million, which increased 7% compared to the first quarter of 2022, ~~was $136.9 million, 79% higher than in~~despite the ~~third quarter~~negative impact of ~~2021 primarily~~pricing, due to ~~increased revenue~~the increase in tons sold. Revenue per ~~tons~~ton sold ~~(FOB Mine)~~decreased 17% from $266 per ton in ~~the third quarter of 2022.~~2022 to $220 per ton in 2023. Revenue per ton sold (FOB mine) ~~increased 92%~~, which excludes transportation revenues, decreased 20% from ~~$105/~~$236 per ton in 2022 to $188 per ton in 2023.

During the ~~third~~second quarter of ~~2021 to $202/ton in~~2023, U.S. metallurgical coal spot pricing declined almost 25% from first quarter 2023 averages on the ~~third~~back of renewed global economic concerns. If indices remain at such levels for the duration of the second quarter, ~~of 2022. We sold 608 thousand tons of coal in~~ the ~~third quarter of 2022, a 6% decrease over the same period in 2021 due to rail-related constraints. We benefited from improved domestic fixed and export spot/index~~Company estimates that average pricing for ~~metallurgical coal in 2022. Additionally, favorable conditions in~~ the ~~steel and metallurgical markets contributed to an increase demand for metallurgical coal and stronger pricing.~~second quarter could fall roughly 10% from first quarter levels.

Cost of sales. Our cost of sales totaled ~~$79.6~~$110.5 million for the ~~three months ended September 30, 2022~~first quarter of 2023 as compared ~~with $54.8~~to $81.3 million for the ~~same period~~first quarter of 2022. The 36% increase versus the prior year was driven by the increase in ~~2021 due to higher sales-related costs directly associated with higher revenue per ton sold in 2022 and inflationary pressures on overall costs. The cash~~tons sold. Total cost per ton sold ~~(FOB mine) for the third quarter of 2022 was $99/ton, compared with $72/~~increased 5% from $139 per ton in 2022 to $146 per ton in 2023. Total cash cost per ton sold (FOB mine), which excludes transportation costs and idle mine costs related to the ~~third quarter of 2021.~~Berwind ignition event, was flat year-to-year at $110 per ton sold.

Asset retirement obligation accretion. Asset retirement obligation accretion was ~~$0.5~~$0.4 million for the three-month period ended ~~September 30, 2022~~March 31, 2023 and $0.2 million for the three-month period ended ~~September 30, 2021.~~March 31, 2022.

Depreciation, depletion, and amortization. Depreciation, depletion, and amortization expense ~~was $11.4~~totaled $11.9 million and ~~$6.8~~$8.7 million for the three-month periods ended ~~September 30,~~March 31, 2023 and March 31, 2022, ~~and September 30, 2021, respectively,~~respectively. The increase was primarily due to additional mining equipment placed in service ~~in recent periods over~~as well as new equipment leases compared to the ~~past~~previous year.

Selling, general and administrative. Selling, general and administrative expenses were ~~$8.7~~nearly flat year over year.

Other income, net. Other income was $1.2 million for the three months ended ~~September 30, 2022 and $5.9~~March 31, 2023 compared to $0.4 million for the ~~three months ended September 30, 2021 primarily due to higher stock compensation, incentives and professional services~~same period in ~~2022, related to the Company’s production growth profile.~~

~~Other income (expense), net.~~ ~~Other expense, net was $1.0 million for the three months ended September 30,~~ 2022. ~~For the three months ended September 30, 2021, other income, net was $0.8 million.~~

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

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~~2021. Interest expense, net was higher~~March 31, 2023 compared to ~~2021 primarily~~$1.1 million during the same period in 2022. The increase in interest expense is generally due to higher debt levels, including debt incurred ~~in the acquisition of Ramaco Coal~~to finance acquisitions in the second ~~quarter~~and third quarters of 2022.

Income tax expense. The effective tax rate for the three months ended ~~September 30,~~March 31, 2023 and March 31, 2022 was 18.0% and ~~2021 was 20% and 21%~~19.5%, 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~~ the ~~difference in~~foreign derived intangible income deduction, and depletion expense ~~between GAAP and federal~~for 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 $237.5~~million 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 $29.3~~million 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

2318

Table of Contents

~~primarily due to the issuance of the Senior Notes in July 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 nine months ended September 30, 2021, we recognized a tax benefit of $1.6 million for legislative changes in West Virginia and Virginia. We also reported discrete items related to stock-based compensation in the 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.

Liquidity and Capital Resources

At ~~September 30, 2022,~~March 31, 2023, we had ~~$46.6~~$36.6 million of cash and cash equivalents and ~~$22.6~~$28.8 million available under our ~~existing credit agreements~~Revolving Credit Facility for future borrowings. In the first quarter of 2023, the Company entered into an arrangement whereby our cash and cash equivalents are placed at various banks in amounts no greater than the $250,000 FDIC insured limit to help safeguard against potential losses in the financial sector.

Significant sources and uses of cash during the first ~~nine~~three months of ~~2022~~2023

Sources of cash:

●

Cash flows from operating activities were ~~$158.8 million. This included~~$21.4 million driven by cash earnings and the ~~negative impact of an~~ increase in ~~inventories of $24.2 million, primarily due to rail-related constraints,~~accounts payable during the quarter. These activities were offset partially by anthe increase in ~~accrued expenses~~accounts receivable during the first quarter of ~~$26.1 million, principally due~~2023 driven by the increase in revenues compared to ~~accrued purchases, income taxes and payroll and related items.~~the fourth quarter of 2022.

●

~~We borrowed approximately $17.0~~Net borrowings from the Revolving Credit Facility increased by $25.0 million (gross proceeds of $45.0 million less repayments of $20.0 million). Proceeds were used to pay down $10.0 million of related party debt (below) as well as for the management of our normal operating cash position.

Uses of cash:

●

Capital expenditures were ~~$91.4~~$23.5 million ~~which were primarily for~~driven by growth projects ~~at the Berwind and Elk Creek mining complexes, excluding the acquisition of the Ramaco Coal and Maben Coal assets.~~

●

We made repayments of ~~$21.1~~$10.0 million ~~primarily for~~and $2.4 million against debt incurred from the 2022 acquisitions of Ramaco Coal ~~acquisition note, equipment financing,~~(a related party) and ~~management of our normal operating cash position.~~Maben assets, respectively.

●

We paid dividends of ~~$15.0~~$5.6 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, 2022, we also had $1.3 million of restricted cash, classified in other current assets in the condensed consolidated balance sheet, for potential future workers’ compensation claims.~~

Future sources and uses of cash

Our primary use of cash includes capital expenditures for mine development, ongoing operating 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~~borrowings under the Revolving Credit Facility, and ~~borrowings discussed in more detail below. We believe that current cash on hand,~~projected 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~~operations. Factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program ~~include:~~include the following:

●

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

●

Late payments of accounts receivable by our customers;

~~Table of Contents~~

●

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~~were to become insufficient to meet our liquidity needs or capital requirements, due to changes in macroeconomic conditions or otherwise, we may reduce our expected level of capital expenditures for new mine production and/or fund a portion of our capital expenditures through the issuance of debt or equity securities, ~~the entry into~~new 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,~~April 2023, shortly after the balance sheet date, the Company repaid $15.0 million of its ~~$17.0 million borrowing~~outstanding borrowings under the Revolving Credit ~~Facility. No other material changes occurred to the Company’s indebtedness after September 30, 2022.~~Facility using funds from current operations.

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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.~~first quarter of 2023.

Off-Balance Sheet Arrangements

~~At September 30, 2022, we had~~A discussion of off-balance sheet arrangements is included in the Annual Report. There were no material ~~off-balance sheet arrangements.~~changes during the first quarter of 2023.

~~Table of Contents~~

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,~~expense; stock-based compensation expense; depreciation, depletion, and amortization ~~expenses,~~expenses; income ~~taxes,~~taxes; accretion of asset retirement obligations; and, when applicable, certain non-operating expenses (charitable contributions)~~, and 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~~a substitute 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 March 31,
(In thousands)	2022		2021		2022		2021		2023		2022
Reconciliation of Net Income to Adjusted EBITDA
Net income	$	26,905	$	7,035	$	101,656	$	21,120	$	25,257	$	41,471
Depreciation and amortization		11,435		6,751		29,898		18,861
Depreciation, depletion, and amortization										11,852		8,680
Interest expense, net		2,255		933		5,323		1,418		2,309		1,130
Income tax expense (benefit)		6,596		1,588		27,068		1,650
Income tax expense										5,548		10,655
EBITDA		47,191		16,307		163,945		43,049		44,966		61,936
Stock-based compensation		2,019		1,342		6,192		3,919		2,937		1,887
Other non-operating expenses		1,000		—		1,000		—
Accretion of asset retirement obligation		495		156		1,485		461		350		235
Adjusted EBITDA	$	50,705	$	17,805	$	172,622	$	47,429	$	48,253	$	64,058

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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 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~~a substitute to revenue under U.S. GAAP.

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

~~Table of Contents~~


	Nine months ended September 30, 2022						Nine months ended September 30, 2021						Three months ended March 31, 2023						Three months ended March 31, 2022
	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	$	424,058	$	6,403	$	430,461	$	190,211	$	5,678	$	195,889	$	158,959	$	7,401	$	166,360	$	150,929	$	3,953	$	154,882
Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)
Transportation costs		(44,749)		(239)		(44,988)		(23,624)		(1,180)		(24,804)		(24,270)		(176)		(24,446)		(17,131)		(239)		(17,370)
Non-GAAP revenue (FOB mine)	$	379,309	$	6,164	$	385,473	$	166,587	$	4,498	$	171,085	$	134,689	$	7,225	$	141,914	$	133,798	$	3,714	$	137,512
Tons sold		1,753		22		1,775		1,707		44		1,751		727		29		757		573		10		583
Revenue per ton sold (FOB mine)	$	216	$	279	$	217	$	98	$	103	$	98	$	185	$	245	$	188	$	234	$	354	$	236

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 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~~a substitute to cost of sales under U.S. GAAP.


	Three months ended September 30, 2022						Three months ended September 30, 2021						Three months ended March 31, 2023						Three months ended March 31, 2022
	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	$	78,818	$	816	$	79,634	$	53,928	$	880	$	54,808	$	104,246	$	6,303	$	110,549	$	77,863	$	3,390	$	81,253
Less: Adjustments to reconcile to Non-GAAP cash cost of sales
Transportation costs		(14,156)		—		(14,156)		(8,548)		(210)		(8,758)		(24,347)		(134)		(24,481)		(17,134)		(239)		(17,373)
Idle mine costs		(5,037)		—		(5,037)		—		—		—		(2,559)		—		(2,559)		—		—		—
Non-GAAP cash cost of sales	$	59,625	$	816	$	60,441	$	45,380	$	670	$	46,050	$	77,340	$	6,169	$	83,509	$	60,729	$	3,151	$	63,880
Tons sold		602		7		608		637		7		644		727		29		757		573		10		583
Cash cost per ton sold	$	99	$	125	$	99	$	71	$	97	$	72	$	106	$	209	$	110	$	106	$	300	$	110

Nine months ended September 30, 2022

Nine months ended September 30, 2021


Company

Purchased



Company

Purchased


(In thousands, except per ton amounts)

Produced

Coal

Total

Produced

Coal

Total

Cost of sales

$
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

(44,749)

(239)

(44,988)

(23,625)

(1,179)

(24,804)
Idle mine costs

(5,037)

—

(5,037)

—

—

—
Non-GAAP cash cost of sales

$
182,750

$
4,755

$
187,505

$
115,238

$
3,726

$
118,964
Tons sold

1,753

22

1,775

1,707

44

1,751
Cash cost per ton sold

$
104

$
215

$
106

$
67

$
85

$
68

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

~~Quantitative and qualitative disclosures~~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 chief executive officer, who serves as our principal executive officer, and chief financial officer, who serves as our 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,~~disclosures, 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.~~report.

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,~~March 31, 2023, 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.

Our senior members of management do not expect that our disclosure controls and procedures or our internal control over financial reporting 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 objectives of the control system are met. Because of its inherent limitations, internal control over financial 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.

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 7 to the Condensed Consolidated Financial Statements included in Part I of this Quarterly Report.

2822

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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 and our Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 9, 2022.~~Report.

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

~~Not applicable.~~None

Item 3. Defaults Upon Senior Securities

~~Not applicable.~~None

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.~~None

2923

Table of Contents

Item 6. Exhibits



~~2.1~~	Securities Purchase Agreement, dated as of August 8, 2022, between Ramaco Development, LLC and Appleton Coal LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-38003) filed with the SEC on August 8, 2022)

+10.1	Loan Agreement, dated as of September 23, 2022, between Ramaco Development, LLC and Investec Bank PLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-38003) filed with the SEC on September 26, 2022)

*+10.2	Second ~~Amendment to~~ Amended and Restated Credit and Security Agreement, dated ~~September 23, 2022,~~February 15, 2023, by and among Ramaco Resources, Inc., Ramaco Development, LLC, Ram Mining, LLC, Ramaco Coal Sales, LLC, Ramaco Resources, LLC, Ramaco Resources Land Holdings, LLC, Maben Coal LLC, Carbon Resources Development, Inc., Ramaco Coal, Inc. as borrowers, the lenders party thereto and KeyBank National Association, as agent, lender, swing line lender, and the issuer (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-38003) filed with the Commission on February 17, 2023)


*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.

3024

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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~~May 9, ~~2022~~2023	By:	/s/ Randall W. Atkins
		Randall W. Atkins
		Chairman, Chief Executive Officer and Director
		(Principal Executive Officer)


~~November~~May 9, ~~2022~~2023	By:	/s/ Jeremy R. Sussman
		Jeremy R. Sussman
		Chief Financial Officer
		(Principal Financial Officer)

3125


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2016
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2822
Item 4.	Controls and Procedures	2822

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	2822
Item 1A.	Risk Factors	2923
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2923
Item 3.	Defaults Upon Senior Securities	2923
Item 4.	Mine Safety Disclosures	2923
Item 5.	Other Information	2923
Item 6.	Exhibits	3024

SIGNATURES		3125


(In thousands)	March 31, 2023		December 31, 2022
Revolving Credit Facility	$	50,000	$	25,000
Equipment loans		6,651		8,396
Senior Notes, net		32,945		32,830
Financing of Ramaco Coal acquisition - Related party debt		30,000		40,000
Financing of Maben Coal acquisition		18,600		21,000
Total debt	$	138,196	$	127,226
Current portion of long-term debt		59,684		75,639
Long-term debt, net	$	78,512	$	51,587


(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


	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