What changed in this filing

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Item 1. Financial Statements

2026-05-06 compared with 2025-11-10 · 228 added, 352 removed, 326 unchanged (64% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30,

Current assets:

4 unchanged sentences

Prepaid expenses

Other current assets

Total current assets

3 unchanged sentences

Mine development

Construction work in progress

Finance lease right-of-use assets

3 unchanged sentences

Equity method investments

Operating lease right-of-use assets

Other noncurrent assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of bank debt, net

Accounts payable and accrued liabilities

Accounts payable

Accrued liabilities and other

Current portion of lease financing

4 unchanged sentences

Long-term lease financing

Deferred income taxes

Asset retirement obligations

6 unchanged sentences

Common stock, $ .01 par value, 100,000 shares authorized;

42,978 and 42,621 issued and outstanding, as of September 30, 2025 and December 31, 2024, respectively

47,132 and 43,817 issued and outstanding, as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

6 unchanged sentences

(in thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

SALES AND OPERATING REVENUES:

10 unchanged sentences

Total operating expenses

INCOME FROM OPERATIONS

INCOME (LOSS) FROM OPERATIONS

Interest income

Interest expense (1)

16 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Depreciation, depletion and amortization

Loss on extinguishment of debt

Gain on disposal or abandonment of assets, net

Loss on extinguishment of debt

Amortization of debt issuance costs

4 unchanged sentences

Accretion on contract liabilities

Amortization of right-of-use assets

Change in current assets and liabilities:

8 unchanged sentences

Proceeds from sale of equipment

Investment in equity method investments

Net cash used in investing activities

3 unchanged sentences

Payments on lease financing

Proceeds from sale and leaseback arrangement

Issuance of related party notes payable

Payments on related party notes payable

Debt issuance costs

Proceeds from ATM offering, net of issuance costs

Proceeds from public offering, net of issuance costs

Taxes paid on vesting of RSUs

8 unchanged sentences

Cash paid for interest

SUPPLEMENTAL NON-CASH FLOW INFORMATION:

Change in capital expenditures included in accounts payable and prepaid expense

Stock issued on redemption of convertible notes and interest

Non-cash change in capital expenditures included in accounts payable and prepaid expense

Right-of-use asset additions

See accompanying notes to the condensed consolidated financial statements.

4 unchanged sentences

Stockholders’

Balance, June 30, 2025

Stock-based compensation

Stock issued on vesting of RSUs

Taxes paid on vesting of RSUs

Balance, September 30, 2025

Balance, December 31, 2025

2 unchanged sentences

Taxes paid on vesting of RSUs

Balance, September 30, 2025

Stock issued in ATM offering

Stock issued in public offering

Balance, March 31, 2026

Common Stock Issued

Stockholders’

Balance, June 30, 2024

Stock-based compensation

Balance, September 30, 2024

Balance, December 31, 2024

2 unchanged sentences

Taxes paid on vesting of RSUs

Stock issued on redemption of convertible notes

Stock issued in ATM offering

Balance, September 30, 2024

Balance, March 31, 2025

See accompanying notes to the condensed consolidated financial statements.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

GENERAL BUSINESS

The condensed consolidated financial statements include the accounts of Hallador Energy Company (hereinafter known as “we, us, or our”) and its wholly owned subsidiaries Hallador Power Company, LLC (“Hallador Power”), Sunrise Coal, LLC (“Sunrise”), and Hourglass Sands, LLC (“Hourglass”), as well as Hallador Power and Sunrise’s wholly owned subsidiaries.

Our business is organized based on the services and products we provide in two segments:

(i) Electric Operations and (ii) Coal Operations.

The Chief Operating Decision Maker (“CODM”), who is the Company’s Chief Executive Officer, reviews and assesses operating performance measures related to our Electric Operations and our Coal Operations segments.

In addition to these reportable segments, the Company has a “Corporate and Other and Eliminations” category, which is not significant enough, on a stand-alone basis, to be considered an operating segment.

Corporate and Other and Eliminations primarily consist of unallocated corporate costs and activities, including a 50 % interest in Sunrise Energy, LLC (“Sunrise Energy”), a private gas exploration company with operations in Indiana and Oaktown Gas, LLC, which we account for using the equity method.

The Electric Operations reportable segment includes electric power generation facilities of the Merom Power Plant (“Merom”).

The Coal Operations reportable segment includes our currently operating underground mining complex Oaktown 1.

We have other mining complexes and locations which were idled during the year ended December 31, 2024.

BASIS OF PRESENTATION

Hallador Energy Company (“Hallador” or the “Company”) is a vertically-integrated, independent power producer (“IPP”) and fuel company with operations primarily in Indiana.

The Company operates across multiple stages of the energy supply chain, from accredited capacity and electricity to coal.

The Company’s condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

The condensed consolidated financial statements include the accounts of Hallador and our wholly owned subsidiaries, including our main operating subsidiaries, Hallador Power Company, LLC (“Hallador Power”) and Sunrise Coal, LLC (“Sunrise”) and their respective subsidiaries, as well as Hourglass Sands, LLC.

Additionally, we hold 50 % interests in Sunrise Energy, LLC (“Sunrise Energy”), a private gas exploration company with operations in Indiana and Oaktown Gas, LLC (“Oaktown Gas”), which we account for using the equity method.

Our operations include Hallador Power which provides accredited capacity and energy to utilities and other energy market participants through the MISO interconnection, and Sunrise which mines bituminous coal in Indiana to serve various power plants in the Midwest and Southeast United States.

All significant intercompany accounts and transactions have been eliminated.

1 unchanged sentence

These presentation changes did not impact the Company’s condensed consolidated net income (loss), consolidated cash flows, total assets, total liabilities or total stockholders’ equity.

The interim financial data is unaudited;

however, in our opinion, it includes all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods.

The condensed consolidated financial statements included herein have been prepared pursuant to the Securities and Exchange Commission’s (the “SEC”) rules and regulations;

accordingly, certain information and footnote disclosures normally included in generally accepted accounting principles (“GAAP”) financial statements have been condensed or omitted.

The results of operations and cash flows for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2025.

Our organization and business, the accounting policies we follow, and other information are contained in the notes to our consolidated financial statements filed as part of our 2024 Annual Report on Form 10-K .

This quarterly report should be read in conjunction with such Annual Report on Form 10-K.

Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information.

Accordingly, these financial statements do not include all of the information required by GAAP or Securities and Exchange Commission (“SEC”) rules and regulations for complete financial statements.

In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods presented.

The results of operations for any interim period are not necessarily indicative of results for the full year.

These unaudited condensed consolidated financial statements should be read in conjunction with our 2025 consolidated financial statements and notes thereto included in our 2025 Annual Report on Form 10-K (our “2025 10-K”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Estimates and assumptions are used in accounting for, among other things, deferred income tax accounts, coal reserves, depreciation, depletion, and amortization, impairment analyses, and calculation of asset retirement obligations (“ARO”).

Actual results could differ from those estimates.

RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements - Adopted

For the year ended December 31, 2024, the Company retrospectively adopted Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

See “ Note 14 – Segments of Business ” for enhanced disclosures associated with the adoption of ASU 2023-07.

Recent Accounting Pronouncements – Not Yet Adopted

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09").

The Company has adopted Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09"), which is effective for fiscal years beginning after December 15, 2024.

ASU 2023-09 primarily requires enhanced disclosures to (1) disclose specific categories in the rate reconciliation, (2) disclose the amount of income taxes paid and expensed disaggregated by federal, state, and foreign taxes, with further disaggregation by individual jurisdictions if certain criteria are met, and (3) disclose income (loss) from continuing operations before income tax (benefit) disaggregated between domestic and foreign.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of adopting ASU 2023-09, but do not expect it to have a material effect on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversion of Convertible Debt Instruments.

The objective of the standard is to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt with Conversion and Other Options.

This standard will affect entities that settle convertible debt instruments for which the conversion privileges are changed to induce conversion.

The guidance will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

The Company is currently evaluating the impact of the new standard on its financial statements and related disclosures.

Please see “ Note 7 – Income Taxes ” for additional information.

Recent Accounting Pronouncements – Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions.

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

The update is intended to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions.

The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

2 unchanged sentences

The Company is currently evaluating the impact of adoption of the standard on its financial statement disclosures.

LONG-LIVED ASSET IMPAIRMENTS

During the year ended December 31, 2024, the Company recorded a $ 215.1 million non-cash impairment charge in our Coal Operations segment due to the results of our annual business plan review.

As part of that business plan review, the Company evaluated core hole samples at several of our mines, noting the samples obtained at our Oaktown 2 mine were determined to be of a lower quality and density than that of the Oaktown 1 mine.

As such, the Company decided to temporarily seal the Oaktown 2 mine, and to focus coal production at the Oaktown 1 mine, which has lower recovery costs.

The fair values of the impaired assets were determined using a discounted cash flow model, which represents Level 3 fair value measurements under the fair value hierarchy.

The fair value analysis used assumptions regarding the projected economics of the Coal Operations assets, given prevailing commodity prices and operating expense levels.

For the three and nine months ended September 30, 2025, no impairment charges were recorded for long-lived assets.

Inventory is valued at a lower of cost or net realizable value (“NRV”).

As of September 30, 2025, and December 31, 2024, coal inventory includes NRV adjustments of $ 0.1 million and $ 0.3 million, respectively.

During the quarter, as part of the Company’s routine inventory reconciliation process, a downward adjustment of $ 2.6 million was recorded to coal inventory.

On June 27, 2025, the Company executed the Third Amendment (“Third Amendment”) to the Fourth Amended and Restated Credit Agreement, dated as of August 2, 2023 (as amended, the “Credit Agreement”), with PNC Bank, National Association (in its capacity as administrative agent, "PNC"), which was accounted for as a debt modification.

The primary purpose of the Third Amendment was to provide additional operating flexibility for the remainder of 2025 by redefining covenants, deferring certain covenants until the third quarter of 2025 and moving our October 2025 payment to January 2026.

The Third Amendment provides for additional flexibility for the Company to enter into prepaid forward power sale contracts, provided that the Company maintains one hundred percent of the outstanding aggregate principal balance of the Credit Agreement (“Term Loan”) as a compensating balance.

During the second quarter of 2025, the Company entered into a $ 35.0 million prepaid forward power sales contract, as noted in “Note 7 – Revenue” of which $ 19.0 million of the proceeds were deposited into a money market account with the administrative agent.

The compensating balance is classified as “restricted cash” on the condensed consolidated balance sheets at September 30, 2025.

As part of the Third Amendment, the required October 2025 principal payment of $ 6.0 million and the January 2026 principal payment of $ 6.5 million, pursuant to the Term Loan, are both now due in January 2026.

The balance of the Term Loan will be fully repaid no later than March 2026.

All payments will be funded by withdrawals from our compensating balance held in our money market account.

Furthermore, the Third Amendment defines certain administrative changes which include, among other things modifications to the required timelines related to reporting and the removal of third-party financial advisors.

On a net basis, bank debt did not change during the nine months ended September 30, 2025.

Bank debt totaled $ 44.0 million as of September 30, 2025 and is comprised of our Term Loan ( $ 19.0 million as of September 30, 2025) and a $ 75.0 million revolver ( $ 25.0 million borrowed as of September 30, 2025) under the Credit Agreement.

Our debt is recorded at amortized cost, which approximates fair value due to the variable interest rates in the agreement and is collateralized primarily by our assets.

As of September 30, 2025, we had additional borrowing capacity of $ 33.8 million under the revolver and total liquidity of $ 46.4 million.

Our additional borrowing capacity is net of $ 16.2 million in outstanding letters of credit as of September 30, 2025 that were required to maintain surety bonds and other credit support obligations .

Inventory is valued at the lower of cost or net realizable value (“NRV”).

Coal inventory includes NRV adjustments of $ 0.1 million as of March 31, 2026, and December 31, 2025.

During 2025, as part of the Company’s routine inventory reconciliation process, a downward adjustment of $ 2.6 million was recorded to coal inventory.

New Credit Facility

On March 5, 2026, Hallador entered into a credit agreement with Texas Capital Bank, as administrative agent, and Old National Bank, among others, that replaces the Credit Agreement with PNC Bank, National Association and includes a $ 75.0 million senior secured revolving credit facility (the "New Revolving Credit Facility") and a $ 45.0 million senior secured term loan facility (the "Delayed Draw Term Loan", and together with the New Revolving Credit Facility, the "New Credit Facility").

The New Revolving Credit Facility includes (i) a $ 25.0 million sub-facility for letters of credit and (ii) a $ 10.0 million sub-facility for swingline loans.

The Company may, subject to conditions set forth in the New Credit Facility, request additional revolving facility commitments and incremental term loan commitments in an aggregate amount not to exceed $ 25.0 million.

The Company and certain of its subsidiaries, as guarantors under the New Credit Facility, granted a security interest in substantially all of their assets to secure the Company’s obligations under the New Credit Facility.

The New Credit Facility bears interest at a rate equal to, at the Company’s election, either a base rate or term secured overnight financing rate (“SOFR”), plus an applicable margin based upon the Company’s total leverage ratio.

Under the New Credit Facility, (A) base rate loans will bear interest at a rate equal to the greater of (i) the prime rate, (ii) the sum of the Federal Funds Rate plus one half of one percent ( 0.50 %), and (iii) the term SOFR plus one percent ( 1.00 %), in each case, plus the applicable margin for base rate loans, which ranges from 2.25 % to 2.75 %, and (B) term SOFR loans will bear interest at term SOFR, plus the applicable margin for term SOFR loans, which ranges from 3.25 % to 3.75 %.

The New Credit Facility includes a commitment fee of 0.50 % on the daily unused portions of the New Revolving Credit Facility.

If the Delayed Draw Term Loan occurs, which is subject to meeting certain conditions, the principal balance of the Delayed Draw Term Loan shall be due and payable in equal quarterly installments of 2.5 % of the original principal amount of such Delayed Draw Term Loan with a final payment of the remaining balance upon maturity.

The New Credit Facility matures on March 5, 2029, and is collateralized by substantially all our assets.

When drawn, the proceeds from the New Credit Facility may be used for ongoing working capital and general corporate purposes.

The Company used borrowings from the New Credit Facility, together with cash on hand to repay the Prior Credit Agreement (as defined below) in full.

As of March 31, 2026, there were no outstanding borrowings under the New Revolving Credit Facility with $ 14.2 million in outstanding letters of credit.

There was no Delayed Draw Term Loan balance outstanding at March 31, 2026.

Prior Credit Agreement

The Company was party to a credit agreement with PNC, in its capacity as administrative agent, which consisted of a revolving credit facility of up to $ 75.0 million and a term loan.

On June 27, 2025, the Company executed the Third Amendment (“Third Amendment”) to our Credit Agreement, which was accounted for as a debt modification.

The primary purpose of the Third Amendment was to provide additional operating flexibility for the remainder of 2025 by redefining covenants and deferring certain covenants until the third quarter of 2025.

During the second quarter of 2025, the Company entered into a $ 35.0 million prepaid forward power sales contract of which $ 19.0 million of the proceeds were deposited into a money market account with the administrative agent as a compensating balance.

The compensating balance was utilized to fully repay the outstanding term loan during the fourth quarter of 2025.

As of March 5, 2026, t he Company fully repaid its revolving credit facility.

Liquidity consists of our additional borrowing capacity and unrestricted cash and cash equivalents.

The Company is currently in discussions with members of its existing bank group and other lenders to refinance our current Credit Agreement.

The revolving credit facility matures August 2, 2026 and our Term Loan matures March 31, 2026.

The balance of the Term Loan is scheduled to be repaid in January 2026 and March 2026, utilizing restricted cash as set forth in the Third Amendment.

As such, our revolving credit facility and Term Loan are listed as current on the September 30, 2025 condensed consolidated balance sheets.

While no definitive agreement has been reached as of the reporting date, management believes it is probable that the Credit Agreement will be refinanced on market terms and conditions for similarly situated borrowers and consistent with the existing Credit Agreement.

However, there can be no assurance that such efforts will be successful or completed on favorable terms.

Failure to refinance our Credit Agreement debt prior to maturity could adversely affect the Company’s liquidity and financial condition.

Unamortized bank fees and other costs incurred in connection with our initial facility totaled $ 4.3 million.

Additional costs incurred with our Debt Agreement amendments totaled $ 0.9 million, of which $ 0.3 million related to our Third Amendment .

These unamortized bank fees were deferred and are being amortized over the term of the loan.

Unamortized bank fees as of September 30, 2025, and December 31, 2024, were $ 1.3 million and $ 2.5 million, respectively.

Unused borrowing capacity under the facility was $ 33.8 million as of September 30, 2025.

Commitment fees on the unused portion of the facility are 0.50 % per annum.

As of March 31, 2026, we had additional borrowing capacity of $ 60.8 million under the New Revolving Credit Facility and total liquidity of $ 97.5 million.

Our additional borrowing capacity is net of $ 14.2 million in outstanding letters of credit as of March 31, 2026 that were required to maintain surety bonds and other credit support obligations .

Bank fees and other costs incurred in connection with the New Credit Facility totaled $ 5.8 million and are reflected in other assets on the condensed consolidated balance sheets.

These fees will be amortized over the term of the loan.

Unamortized bank fees as of March 31, 2026, and December 31, 2025, were $ 5.6 million and $ 0.3 million, respectively.

The New Credit Facility includes a commitment fee of 0.50 % on any daily unused portions of the New Revolving Credit Facility.

Unamortized bank fees and other costs incurred in connection with our Prior Credit Agreement of $ 0.2 million were recorded as a loss on extinguishment of debt on the condensed consolidated statements of operations.

Bank debt, less debt issuance costs, is presented below (in thousands):

September 30,

Current bank debt

7 unchanged sentences

Net bank debt

Future Maturities (in thousands):

The Third Amendment, among other things, deferred the Maximum Leverage Ratio and Minimum Debt Service Coverage Ratios until September 2025.

The Maximum Leverage Ratio requirement was changed to 3.00 to 1.00 for our fiscal quarter ending September 30, 2025, and is 2.25 to 1.00 thereafter.

The Debt Service Coverage Ratio requirement was changed to 3.25 to 1.00 as long as the Company maintains the required compensating balance, if not, remains at 1.25 to 1.00.

The Third Amendment removed the First Lien Leverage Ratio (as defined in the First Amendment to the Credit Agreement) while maintaining the minimum liquidity requirement of $ 10.0 million.

As of September 30, 2025, we were in compliance with all covenants defined in the Credit Agreement.

(1) Unamortized debt issuance costs of $ 1.9 million is included in other current assets and $ 3.7 million is included in other noncurrent assets on the condensed consolidated balance sheets as of March 31, 2026.

Prior to the date on which the conditions to availability of the Delayed Draw Term Loan are satisfied, our covenants include:

● Total leverage ratio – 2.50 to 1.00 stepping down to 2.25 to 1.00 in the fourth quarter 2026.

● Senior secured leverage ratio – 2.50 to 1.00 stepping down to 2.25 to 1.00 in the fourth quarter 2026.

● Minimum liquidity threshold – $ 20.0 million increasing to $ 25.0 million in the fourth quarter 2026.

● Fixed charge coverage ratio – 1.25 to 1.00.

After the conditions to availability of the Delayed Draw Term Loan are satisfied, our covenants will include:

● Total leverage ratio – 3.25 to 1.00 stepping down to 3.00 to 1.00 in the fourth quarter 2026.

● Senior secured leverage ratio – 2.00 to 1.00.

● Fixed charge coverage ratio – 1.25 to 1.00.

As of March 31, 2026, we were in compliance with all covenants defined in the New Credit Facility.

Interest Rate

The interest rate on the facility ranges from secured overnight financing rate (“SOFR”) plus 4.00 % to SOFR plus 5.00 %, depending on our Leverage Ratio.

As of September 30, 2025, we were paying SOFR plus 5.00 % on the outstanding bank debt which equates to an all-in rate of 9.27 %.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following for the indicated dates (in thousands):

September 30,

Accounts payable

The New Credit Facility bears interest with margins ranging from 2.25 % to 3.75 % above SOFR or the applicable base rate, subject to a SOFR floor of 1.00 %, as further described above.

The applicable margin is determined based upon the Company's leverage ratio and the type of loan drawn.

As of March 31, 2026, we were subject to paying the applicable SOFR plus 3.50 % on any outstanding bank debt which equates to an all-in rate of 7.16 %.

ACCRUED LIABILITIES AND OTHER

Accrued liabilities consist of the following for the indicated dates (in thousands):

Accrued liabilities

Workers' compensation reserve

Accrued property taxes

Accrued payroll

Workers' compensation reserve

Group health insurance

Asset retirement obligation - current portion

Total accounts payable and accrued liabilities

ARO - current portion

Group heath insurance

Operating lease liability - current portion

Total accrued liabilities and other

Revenue from Contracts with Customers

We account for a contract with a customer when the parties have executed the contract and are committed to performing their respective obligations, the rights of each party are identified, payment terms are identified, the contract has commercial substance, and it is probable substantially all the consideration will be collected.

We account for contracts with customers when the parties have executed the contract and are committed to performing their respective obligations, the rights of each party are identified, payment terms are identified, the contract has commercial substance, and it is probable substantially all the consideration will be collected.

We recognize revenue when we satisfy a performance obligation by transferring control of a good or service to a customer.

Electric Operations

We concluded that for a Power Purchase Agreement (“PPA”) that is not determined to be a lease or derivative, the definition of a contract and the criteria in ASC 606, Revenue from Contracts with Customers (“ASC 606”), is met at the time a PPA is executed by the parties, as this is the point at which enforceable rights and obligations are established.

time a PPA is executed by the parties, as this is the point at which enforceable rights and obligations are established.

Accordingly, we concluded that a PPA that is not determined to be a lease or derivative constitutes a valid contract under ASC 606.

We recognize revenue daily, based on an output method of capacity made available as part of any stand-ready obligations for contract capacity performance obligations and daily, based on an output method of MWh of electricity delivered.

For the delivered energy performance obligation in the PPA with Hoosier, we recognize revenue daily for actual delivered electricity plus the amortization of the contract liability as a result of the Asset Purchase Agreement with Hoosier.

For delivered energy to all other customers, we recognize revenue daily for the actual delivered electricity.

When energy hours at the Merom Hub are priced below our production cost or during outages at Merom, we have the option to make net hourly purchases of power in the MISO market.

We record these as “cost of purchased power” on our condensed consolidated statements of operations.

Under accredited capacity PPAs, we recognize revenue daily, based on an output method of capacity made available as part of any stand-ready obligations for contracted accredited capacity performance obligations.

For delivered energy PPAs, we recognize revenue daily for the actual delivered MWh of electricity.

For the prepaid delivered energy PPAs, we recognize revenue daily for the funds received for the actual delivered MWh of electricity plus any accretion attributable to the time value of money.

When there is an outage at one of the generating units at Merom or energy hours at the Merom Hub are priced below our production cost, we have the option to make net hourly purchases of power in the MISO market to satisfy our obligations, which we record as cost of purchased power in our condensed consolidated statements of operations.

Coal operations

Our coal revenue is derived from sales to customers of coal produced at our facilities.

Our customers typically purchase coal directly from our mine sites where the sale occurs and where title, risk of loss, and control pass to the customer at that point.

Our coal revenue is derived from sales to customers of coal produced at our mining facilities.

Our customers typically purchase coal free on board from our mine sites where title, risk of loss, and control pass to the customer.

Our customers arrange for and bear the costs of transporting their coal from our mines to their plants or other specified discharge points.

Our customers are typically domestic utility companies.

Our coal sales agreements with our customers are fixed-priced, fixed-volume supply contracts, or include a pre-determined escalation in price for each year.

Price re-opener and index provisions may allow either party to commence a renegotiation of the contract price at a pre-determined time.

Price re-opener provisions may automatically set a new price based on the prevailing market price or, in some instances, require us to negotiate a new price, sometimes within specified ranges of prices.

Coal sales agreements with our customers are fixed-priced, fixed-volume supply contracts, but some include a pre-determined escalation in price for each year and some allow for our customers to vary the fixed-volume by pre-determined quantities during a set period, such as quarterly.

The terms of our coal sales agreements result from competitive bidding and extensive negotiations with customers.

Consequently, the terms of these contracts vary by customer.

Coal sales agreements will typically contain coal quality specifications.

With coal quality specifications in place, the raw coal sold by us to the customer at the delivery point must be substantially free of magnetic material and other foreign material impurities and crushed to a maximum size as set forth in the respective coal sales agreement.

Price adjustments are made and billed in the month the coal sale was recognized based on quality standards that are specified in the coal sales agreement, such as Btu factor, moisture, ash, and sulfur content, and can result in either increases or decreases in the value of the coal shipped.

Coal sales agreements typically contain coal quality specifications which require the raw coal sold by us to the customer to be (i) substantially free of magnetic material and other foreign material impurities and (ii) crushed to a maximum size as set forth in the respective coal sales agreement.

Price adjustments are made and billed in the month the coal sale was recognized based on quality standards that are specified in the coal sales agreement, such as British thermal unit factor, moisture, ash, and sulfur content, and can result in either increases or decreases in the value of the coal shipped.

When applicable, we have constrained the expected value of variable consideration in our estimation of transaction price and only included this consideration to the extent that it is probable that a significant revenue reversal will not occur.

Disaggregation of Revenue

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Electric Operations

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Delivered energy (including contract liability amortization)

Accredited capacity

Total Electric Operations sales

Coal Operations

Three Months Ended September 30,

Nine Months Ended September 30,

Outside third-party Indiana customers

Customers in Florida, North Carolina, Alabama and Georgia

Three Months Ended March 31,

Third party Indiana customers

Other customers

Total Coal Operations sales

Performance Obligations

Electric Operations

We concluded that each megawatt hour (“MWh”) of delivered energy is capable of being distinct as a customer could benefit from each on its own by using/consuming it as a part of its operations.

We also concluded that the stand-ready obligation to be available to provide electricity is capable of being distinct as each unit of capacity provides an economic benefit to the holder and could be sold by the customer.

During the second quarter of 2025, we entered into a 17-month , $ 35.0 million prepaid physically delivered power contract with energy to be delivered at various periods starting in July 2025 through November 2026.

During the third quarter of 2025, we entered into a 5-month , $ 20.0 million prepaid physically delivered power contract with energy to be delivered January 2027 through May 2027.

As the total amounts paid upfront by the customers differ from the stand-alone selling price of the transferred power, the Company concluded the contracts contain a significant financing component.

The contract liabilities associated with the prepayments will be accreted over the agreement term based upon the Company’s incremental borrowing rates at the time of the contract which approximates 9.50 % and 9.92 % for the respective contracts, and the accretion is separately recognized as interest expense.

Coal Operations

A performance obligation is a promise in a contract with a customer to provide distinct goods or services.

Performance obligations are the unit of account for purposes of applying the revenue recognition standard and therefore determine when and how revenue is recognized.

Electric Operations

We concluded that each MWh of delivered energy is capable of being distinct as a customer could benefit from each on its own by using/consuming it as a part of its operations.

We also concluded that the stand-ready obligation to be available to provide electricity is capable of being distinct as each unit of accredited capacity provides an economic benefit to the holder and could be sold by the customer.

Coal Operations

In most of our coal contracts, the customer contracts with us to provide coal that meets certain quality criteria.

We consider each ton of coal a separate performance obligation and allocate the transaction price based on the base price per the contract, increased or decreased for quality adjustments.

The following table illustrates the balance of all current Electric and Coal Operations contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2025 and disaggregated by segment and contract duration.

Delivered energy revenues

Capacity revenues

Coal Operations revenues (1)

We consider each ton of coal a separate performance obligation and allocate the transaction price using the base price per the contract, increased or decreased for quality adjustments.

The following table illustrates the balance of all current Electric and Coal Operations contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2026 and disaggregated by segment and contract duration (in thousands).

Delivered energy revenue

Accredited capacity revenue

Coal Operations revenue (1)

Total revenue

(1) Coal revenues consist of consolidated revenues excluding our intercompany revenues from Merom .

(1) Coal Operations revenue consists of consolidated revenue excluding our intercompany revenues from Merom.

Contract Balances

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A receivable is an entity’s right to consideration that is unconditional.

Under the typical payment terms of our contracts with customers, the customer pays us the contracted price for electricity or capacity.

Under the typical payment terms of our contracts with customers, the customer pays us the contracted price for electricity or accredited capacity.

For coal contracts, the customer pays us a base price for the coal, increased or decreased for any quality adjustments.

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Payments received prior to fulfilling our performance obligations are included in contract liabilities in our condensed consolidated balance sheets.

The following table shows our beginning and ending accounts receivable from contracts with customers balance for the periods presented (in thousands):

September 30,

When the Company receives customer payments more than one year in advance of the related performance obligations, in accordance with ASC 606, the Company adjusts the transaction price for the significant financing component associated with these contracts at risk adjusted market rates.

The resulting interest accretion is recognized as interest expense over the period between the customer payment date and the expected satisfaction of the performance obligation.

The following table shows our beginning and ending accounts receivable balances from contracts with customers for the periods presented (in thousands):

Accounts receivable from contracts with customers - beginning balance

Accounts receivable from contracts with customers - ending balance

As the Company fulfills its contractual obligations, we recognized those amounts in revenues.

As the Company fulfills its contractual obligations, we recognized those amounts in revenue.

The following table reconciles our beginning and ending contract liabilities for the periods presented (in thousands):

September 30,

Total contract liabilities - beginning balance

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Revenue recognized, cash payment received in prior period

Revenue recognized, cash payment received in current period

Total contract liabilities - ending balance

For the nine months ended September 30, 2025 and 2024, we recorded income taxes using an estimated annual effective tax rate based upon projected annual income (loss), forecasted permanent tax differences, discrete items, and statutory rates in states in which we operate.

The effective tax rate for the nine months ended September 30, 2025 and 2024, was ~ 0 % due to recording of a full valuation allowance and ~ 24 %, respectively.

Historically, our actual effective tax rates have differed from the statutory effective rate primarily due to the benefit received from statutory percentage depletion in excess of tax basis.

For the three months ended March 31, 2026 and 2025, we recorded income taxes using an estimated annual effective tax rate based upon projected annual income (loss), forecasted permanent tax differences, discrete items, and statutory rates in states in which we operate.

The effective tax rate for the three months ended March 31, 2026 and 2025, was approximately 5.2 % and 0 %, respectively, due to recording of a valuation allowance.

Historically, our actual effective tax rates differed from the statutory effective rate primarily due to the benefit received from statutory percentage depletion in excess of tax basis.

The deduction for statutory percentage depletion does not necessarily change proportionately to changes in income (loss) before income taxes.

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The OBBBA includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international), expanding certain Inflation Reduction Act incentives, and accelerating the phase-out of or repealing others.

We have analyzed the provisions within the act and determined that the benefits relating to capital expenditures and deductibility of interest under IRC Section 163(j) will provide cash flow benefits to the company in 2025 by accelerating deductions for tax purposes.

As the material benefits relate to the timing of deductions, there were no material impact affecting the effective tax rate or the valuation allowance determination in the third quarter of 2025.

As the material benefits relate to the timing of deductions, there were no material impact affecting the effective tax rate or the valuation allowance determination in the period that OBBBA was enacted.

STOCK COMPENSATION PLANS

Non-vested grants and activity for the period presented are as follows (in whole shares):

Non-vested grants as of December 31, 2025

Non-vested grants as of September 30, 2025

For the three and nine months ended September 30, 2025, our stock compensation expense was $ 0.6 million and $ 2.1 million, respectively.

For the three and nine months ended September 30, 2024, our stock compensation expense was $ 1.1 million and $ 3.3 million, respectively.

Non-vested RSU grants will vest as follows:

As noted in our Form 8-K filed with the SEC on June 2, 2025, on May 29, 2025, shareholders approved the Second Amended and Restated 2008 Restricted Stock Unit Plan (the “RSU Plan”) which, (i) increased the number of shares available for issuance by 2,000,000 shares, and (ii) extended the term of the RSU Plan until May 29, 2035.

As of September 30, 2025, unrecognized stock compensation expense to be recognized over the rolling 3 -year vesting period is $ 6.4 million, and we had 1,897,154 RSUs available for future issuance.

Non-vested grants as of March 31, 2026

Stock compensation expense was $ 1.1 million for the three months ended March 31, 2026 and 2025.

Non-vested restricted stock unit (“RSU”) grants will vest as follows (in whole shares):

As of March 31, 2026, unrecognized stock compensation expense to be recognized over the respective vesting period is $ 3.2 million, and we had 2,075,261 RSUs available for future issuance.

RSUs are not allocated earnings and losses as they are considered non-participating securities.

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SELF-INSURANCE

The Company is self-insured for certain risks, including physical damage and operational liability, related to our non-leased underground mining equipment allocated among four mining units dispersed over seven miles.

The Company is self-insured for certain risks, including physical damage and operational liability, related to our non-leased underground mining equipment.

The Company records a liability for self-insured risks when a loss is both probable and reasonably estimable.

The Company had no accrual for self-insurance liabilities as of September 30, 2025 or December 31, 2024.

The Company also self-insures for workers’ compensation claims under a guaranteed cost program.

The Company had no accrual for self-insurance liabilities as of March 31, 2026 or December 31, 2025.

The Company also self-insures for a portion of its workers’ compensation claims under a guaranteed cost program.

Under this program, the Company is responsible for the first $ 1.0 million per claim up to an aggregate of $ 4.0 million annually.

The Company has restricted cash of $ 22.8 million and $ 4.9 million as of September 30, 2025, and December 31, 2024, respectively, which represents cash held and controlled by third parties and is restricted primarily for future workers’ compensation claim payments and the $ 19.0 million compensating balance on our Term Loan (as discussed in “Note 5 – Bank Debt” above).

The Company had $ 5.4 million and $ 4.3 million of workers’ compensation reserve as of September 30, 2025 and December 31, 2024 , respectively, in “accounts payable and accrued liabilities” on the condensed consolidated balance sheets.

As of March 31, 2026 and December 31, 2025 the Company has restricted cash of $ 3.3 million and $ 3.0 million as of March 31, 2026 and December 31, 2025, respectively, for future workers’ compensation claim payments.

The Company had $ 4.7 million and $ 5.2 million of workers’ compensation reserve as of March 31, 2026 and December 31, 2025 , respectively, in accrued liabilities on the condensed consolidated balance sheets.

FAIR VALUE MEASUREMENTS

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Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

We consider active markets as those in which transactions for the assets or liabilities

occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

We consider active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

We have no Level 1 instruments .

Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

We have no Level 2 instruments.

Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity).

ARO liabilities use Level 3 non-recurring fair value measures .

Nonrecurring Fair Value Measurements

During the fourth quarter of 2024, the Company completed its review of the coal mining facilities and future mining plans.

The impairment analysis was based upon the coal mining operating plans of the Company, market driven pricing and cost trends.

As part of that analysis, the Company determined the carrying amount of its coal mining long-lived asset group was not recoverable and recorded a non-cash, long-lived asset impairment charge of $ 215.1 million in 2024.

The discounted cash flow model was calculated using projected economics for the Coal Operations assets, using the Company’s mining plan and reserve estimates to be mined and sold at prevailing commodity prices, operating expenses, and production cost levels, which are classified as Level 3 inputs.

The carrying amounts for cash equivalents, accounts receivable, accounts payable, accrued liabilities and other, approximate fair value due to the short maturity of those instruments.

Our debt is recorded at amortized cost, which approximates fair value due to the variable interest rates in the agreement and is collateralized primarily by our assets.

The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents, and restricted cash.

The Company’s cash and cash equivalent and restricted cash balances on deposit with financial institutions total $ 35.5 million and $ 12.2 million as of September 30, 2025 and December 31, 2024, respectively, which exceeded FDIC insured limits.

The Company’s cash and cash equivalent and restricted cash balances on deposit with financial institutions total $ 43.4 million and $ 15.4 million as of March 31, 2026 and December 31, 2025, respectively, which exceeded FDIC insured limits.

The Company regularly monitors these institutions’ financial condition.

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EQUITY METHOD INVESTMENTS

We own a 50 % interest in Sunrise Energy, LLC, which owns gas reserves and gathering equipment with plans to develop and operate such reserves.

Sunrise Energy, LLC, also plans to develop and explore for oil, natural gas, and coal-bed methane gas reserves on or near our underground coal reserves.

The carrying value of the investment included in our condensed consolidated balance sheets as of September 30, 2025, and December 31, 2024, was $ 2.0 million and $ 2.1 million, respectively.

We own a 50 % interest in Sunrise Energy which owns gas reserves and gathering equipment with plans to develop and operate such reserves.

Sunrise Energy also plans to develop and explore for oil, natural gas, and coal-bed methane gas reserves on or near our underground coal reserves.

The carrying value of the investment included in our condensed consolidated balance sheets was $ 1.9 million as of March 31, 2026 and December 31, 2025.

The Company also owns a 50 % interest in Oaktown Gas, LLC.

Oaktown Gas, LLC operates an emission abatement project through the destruction of gases extracted from the Oaktown mines to generate carbon credits and other emissions offset credits.

The carrying value of the investment included in the condensed consolidated balance sheets as of September 30, 2025, and December 31, 2024, was $ 0.7 million and $ 0.5 million, respectively.

ORGANIZATIONAL RESTRUCTURING

On February 23, 2024, (the “Effective Date”), we committed to a reorganization effort in the Coal Operations Segment (the “Reorganization Plan”) that included a workforce reduction of approximately 110 employees, or approximately 12 % of the workforce.

The reduction in workforce was communicated to employees on the Effective Date and implemented immediately, subject to certain administrative procedures.

The Reorganization Plan was designed to strengthen our financial and operational efficiency and create significant operational savings and higher margins in our Coal Operations segment.

This step helped advance our transition from a company primarily focused on coal production to a more resilient and diversified integrated independent power producer (“IPP”).

As part of this initiative, we substantially idled production at our higher cost surface mines, Prosperity Mine and Freelandville Mine, with minimal

ongoing production.

We also focused our seven units of underground equipment on four units of our lowest cost production at our Oaktown Mine.

In connection with the Reorganization Plan, we incurred aggregate expenses of $ 1.9 million ($ 1.1 million in the first quarter of 2024 and $ 0.8 million in the second quarter of 2024) that were included in “ labor ” in the condensed consolidated statements of operations.

These charges related to compensation, tax, professional, and insurance related expenses are considered one-time charges paid during 2024.

The coal mining properties asset group was tested for impairment as result of the organizational restructuring passing the undiscounted recoverability test.

The carrying value of the investment included in the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, was $ 0.6 million and $ 0.7 million, respectively.

SEGMENTS OF BUSINESS

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Our sales region is in MISO Zone 6, which includes Indiana and a portion of western Kentucky.

Revenues from our Electric Operations segment consist primarily of delivered energy and capacity revenues.

Fuel costs included in our Electric Operations segment include the cost of coal purchased from our Coal Operations segment, which are based on multi-year contracts which approximate market prices at the time the contracts are entered into.

Revenues from our Electric Operations segment consist primarily of delivered energy and accredited capacity revenues.

Our Coal Operations segment includes the Oaktown 1 underground mining complex, as well as other currently idled mining facilities, which produce high-quality bituminous coal from the Illinois Basin.

Revenues from our Coal Operations segment consist of sales of coal to various third-parties and to Merom.

Coal sales to our Electric Operations are based on multi-year contracts which approximate market prices at the time the contracts are entered into.

Intercompany coal sales and amounts above actual costs to produce the coal are eliminated in the consolidated statements of operations.

Revenue from our Coal Operations segment consists of sales of coal to various third parties and to Merom.

Coal sales to our Electric Operations are based on multi-year contracts that approximated market prices at the time the contracts were agreed.

Intercompany coal sales and amounts above actual costs to produce the coal are eliminated in the condensed consolidated statements of operations.

Corporate and Other and Eliminations primarily consist of unallocated corporate costs and activities, including our equity method investments.

The CODM evaluates segment performance based upon EBITDA margin for each business segment.

EBITDA margin is calculated for each segment as follows:

For our Electric Operations segment, EBITDA margin is comprised of delivered energy revenues less certain significant segment expenses, which include (i) variable costs are comprised of fuel costs and certain other operating costs, such as limestone and soda ash, (ii) other operating and maintenance costs, (iii) costs of purchased power, (iv) utilities, (v) labor and (vi) general and administrative costs.

For our Coal Operations segment, EBITDA margin is comprised of coal sales less certain significant segment expenses, which include (i) fuel, (ii) other operating and maintenance costs, (iii) utilities, (iv) labor and (v) general and administrative costs.

EBITDA margin for each segment is a key measure used by our CODM and provides information about our core operating performance, significant expenses and ability to generate cash flow.

Additionally, EBITDA margin provides investors with the financial analytical framework upon which our CODM bases financial, operational, compensation and planning decisions and presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations.

Our CODM reviews variable costs, as defined above, in our Electric Operations segment in order to evaluate the efficiency of that segments operations.

Presented below are the Electric and Coal Operations key metrics reviewed by the CODM for the three months ended September 30, 2025 (in thousands):

Electric Operations

Coal Operations

Delivered Energy

Capacity Revenue

Electric Sales

Other Operating Costs (1)

Total Variable Costs

Other Operating and Maintenance Costs (2)

Cost of Purchased Power

Other Operating and Maintenance Costs

Power Margin Without General and Administrative

Coal Margin Without General and Administrative

General and Administrative

Electric Operations — EBITDA Margin

Coal Operations — EBITDA Margin

(1) Other operating costs primarily include costs for lime dust.

(2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable as discussed above in (1).

Presented below are the Electric and Coal Operations key metrics reviewed by the CODM for the three months ended September 30, 2024 (in thousands):

Electric Operations

Coal Operations

Delivered Energy

Capacity Revenue

Electric Sales

Other Operating Costs (1)

Total Variable Costs

Other Operating and Maintenance Costs (2)

Cost of Purchased Power

Other Operating and Maintenance Costs

Power Margin Without General and Administrative

Coal Margin Without General and Administrative

General and Administrative

Electric Operations — EBITDA Margin

Coal Operations — EBITDA Margin

(1) Other operating costs primarily include costs for lime dust.

(2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable as discussed above in (1).

Presented below are the Electric and Coal Operations key metrics reviewed by the CODM for the nine months ended September 30, 2025 (in thousands):

The CODM evaluates segment performance based upon Segment EBITDA for each business segment.

Segment EBITDA is calculated for each segment as follows:

For our Electric Operations segment, Segment EBITDA is comprised of accredited capacity and delivered energy revenues less certain significant segment expenses, which include (i) variable costs comprised of fuel costs and certain other operating costs, such as limestone and soda ash, (ii) other operating and maintenance costs, (iii) costs of purchased power, (iv) utilities, (v) labor and (vi) general and administrative costs .

For our Coal Operations segment, Segment EBITDA is comprised of coal sales less certain significant segment expenses, which include (i) fuel, (ii) other operating and maintenance costs, (iii) utilities, (iv) labor and (v) general and administrative costs.

Segment EBITDA for each segment is a key measure used by our CODM and provides information about our core operating performance, significant expenses and ability to generate cash flow.

Additionally, Segment EBITDA provides investors with the financial analytical framework upon which our CODM bases financial, operational, compensation and planning decisions and presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations.

Our CODM reviews variable costs, as defined above, in our Electric Operations segment in order to evaluate the efficiency of that segment’s operations.

Presented below are the Electric and Coal Operations key metrics reviewed by the CODM for the three months ended March 31, 2026 (in thousands):

Electric Operations

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Delivered energy

Capacity Revenue

Accredited capacity revenue

Electric sales

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General and administrative

Electric Operations — EBITDA Margin

Coal Operations — EBITDA Margin

Electric Operations — Segment EBITDA

Coal Operations — Segment EBITDA

(1) Other operating costs primarily include costs for lime dust.

(2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable as discussed above in (1).

Presented below are the Electric and Coal Operations key metrics reviewed by the CODM for the nine months ended September 30, 2024 (in thousands):

(2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable included in fuel and other operating costs.

Presented below are the Electric and Coal Operations key metrics reviewed by the CODM for the three months ended March 31, 2025 (in thousands):

Electric Operations

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Delivered energy

Capacity Revenue

Accredited capacity revenue

Electric sales

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General and administrative

Electric Operations — EBITDA Margin

Coal Operations — EBITDA Margin

Electric Operations — Segment EBITDA

Coal Operations — Segment EBITDA

(1) Other operating costs primarily include costs for lime dust.

(2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable as discussed above in (1).

Presented below are the Electric and Coal Operations revenues reconciled to our consolidated operating revenues for the three months ended September 30, 2025 (in thousands):

Corporate and Other

Reconciliation of Revenue:

Electric Operations

Coal Operations

and Eliminations

Delivered Energy

Capacity Revenue

Other Revenue

Coal Sales (Third-Party)

Coal Sales (Intercompany)

Operating Revenues

Presented below are the Electric and Coal Operations revenues reconciled to our consolidated operating revenues for the three months ended September 30, 2024 (in thousands):

Corporate and Other

Reconciliation of Revenue:

Electric Operations

Coal Operations

and Eliminations

Delivered Energy

Capacity Revenue

Other Revenue

Coal Sales (Third-Party)

Coal Sales (Intercompany)

Operating Revenues

Presented below are the Electric and Coal Operations revenues reconciled to our consolidated operating revenues for the nine months ended September 30, 2025 (in thousands):

(2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable included in fuel and other operating costs.

Presented below are the Electric and Coal Operations revenues reconciled to our consolidated operating revenues for the three months ended March 31, 2026 (in thousands):

Corporate and Other

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Delivered energy

Capacity Revenue

Other Revenue

Accredited capacity revenue

Other operating revenue

Coal sales (third party)

Coal sales (intercompany)

Operating Revenues

Presented below are the Electric and Coal Operations revenues reconciled to our consolidated operating revenues for the nine months ended September 30, 2024 (in thousands):

Operating Revenue

Presented below are the Electric and Coal Operations revenues reconciled to our consolidated operating revenues for the three months ended March 31, 2025 (in thousands):

Corporate and Other

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Delivered energy

Capacity Revenue

Other Revenue

Accredited capacity revenue

Other operating revenue

Coal sales (third party)

Coal sales (intercompany)

Operating Revenues

Presented below is our reconciliation of EBITDA Margin to the most comparable GAAP account, income (loss) before income taxes for the three months ended September 30, 2025 (in thousands):

Reconciliation of Income (Loss)

Operating Revenue

Presented below is our reconciliation of Segment EBITDA to the most comparable GAAP account, income (loss) before income taxes for the three months ended March 31, 2026 (in thousands):

Corporate and Other

before Income Taxes:

Reconciliation of Income (Loss) before Income Taxes:

Electric Operations

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and Eliminations

Electric Operations — EBITDA Margin

Coal Operations — EBITDA Margin

Other Operating Revenue

Depreciation, Depletion and Amortization

Asset Retirement Obligations Accretion

Exploration Costs

Gain (loss) on disposal or abandonment of assets, net

Interest Expense

Equity Method Investment (Loss)

Corporate — General and Administrative

Income (Loss) before Income Taxes

Presented below is our reconciliation of EBITDA Margin to the most comparable GAAP account, income (loss) before income taxes for the three months ended September 30, 2024 (in thousands):

Reconciliation of Income (Loss)

Corporate and Other

before Income Taxes:

Electric Operations

Coal Operations

and Eliminations

Electric Operations — EBITDA Margin

Coal Operations — EBITDA Margin

Other operating revenue

Depreciation, depletion and amortization

Asset Retirement Obligations Accretion

ARO accretion

Exploration costs

(Gain) loss on disposal or abandonment of assets, net

Interest income

Interest expense

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Corporate — general and administrative

Corporate — Other Operating and Maintenance Costs

Income (Loss) before Income Taxes

Presented below is our reconciliation of EBITDA Margin to the most comparable GAAP account, income (loss) before

income taxes for the nine months ended September 30, 2025 (in thousands):

Reconciliation of Income (Loss)

Segment EBITDA

Presented below is our reconciliation of Segment EBITDA to the most comparable GAAP account, income (loss) before income taxes for the three months ended March 31, 2025 (in thousands):

Corporate and Other

before Income Taxes:

Reconciliation of Income (Loss) before Income Taxes:

Electric Operations

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and Eliminations

Electric Operations — EBITDA Margin

Coal Operations — EBITDA Margin

Other Operating Revenue

Depreciation, Depletion and Amortization

Asset Retirement Obligations Accretion

Exploration Costs

Gain (loss) on disposal or abandonment of assets, net

Interest Expense

Equity Method Investment (Loss)

Corporate — General and Administrative

Income (Loss) before Income Taxes

Presented below is our reconciliation of EBITDA Margin to the most comparable GAAP account, income (loss) before income taxes for the nine months ended September 30, 2024 (in thousands):

Reconciliation of Income (Loss)

Corporate and Other

before Income Taxes:

Electric Operations

Coal Operations

and Eliminations

Electric Operations — EBITDA Margin

Coal Operations — EBITDA Margin

Other operating revenue

Depreciation, depletion and amortization

Asset Retirement Obligations Accretion

ARO accretion

Exploration costs

(Gain) loss on disposal or abandonment of assets, net

Interest income

Interest expense

Loss on Extinguishment of Debt

Equity method investment (loss)

Corporate — general and administrative

Corporate — Other Operating and Maintenance Costs

Income (Loss) before Income Taxes

Segment EBITDA

Presented below are our Electric and Coal Operations assets and capital expenditures for the periods presented below (in thousands):

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and Eliminations

Assets at September 30, 2025

Assets at March 31, 2026

Assets at December 31, 2025

Capital Expenditures at September 30, 2025

Capital Expenditures for the period ending March 31, 2026

(1) Coal Operations assets include cash held on behalf of the consolidated group.

Cash held by our Coal Operations includes funds transferred from Electric Operations and Hallador for centralized treasury management purposes.

This presentation is not reflective of Coal Operations earnings capacity;

refer to the condensed consolidated balance sheets and the “Liquidity of Hallador” in the “Material Changes in Financial Condition” section of “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a complete view of the Company's cash position.

Cash and cash equivalents included in Coal Operations assets were $ 36.3 million and $ 9.4 million as of March 31, 2026 and December 31, 2025, respectively.

Presented below are our Electric and Coal Operations assets and capital expenditures for the periods presented below (in thousands):

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and Eliminations

Assets at September 30, 2024

Assets at March 31, 2025

Assets at December 31, 2024

Capital Expenditures at September 30, 2024

Capital Expenditures for the period ending March 31, 2025

Cash and cash equivalents included in Coal Operations assets were $ 5.6 million and $ 6.9 million as of March 31, 2025 and December 31, 2024, respectively.

NET INCOME (LOSS) PER SHARE

The following table (in thousands, except per share amounts) sets forth the computation of basic earnings (loss) per share for the periods indicated:

Three Months Ended September 30,

Nine Months Ended September 30,

The following table (in thousands, except per share amounts) sets forth the computation of basic earnings (loss) per share for the periods presented:

Three Months Ended March 31,

Basic earnings per common share:

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The following table (in thousands, except per share amounts) sets forth the computation of diluted net income (loss) per share:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Diluted earnings per common share:

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Diluted net income (loss) per share

The computation of diluted net loss per share for the three months ended March 31, 2026 excludes 389,276 potentially dilutive securities related to unvested restricted stock units as their inclusion would have been anti-dilutive.

CONTINGENCIES

Our Coal Operations subsidiary is party to litigation in which the plaintiffs allege violations of the Fair Labor Standards Act and state law due to alleged failure to compensate for time "donning" and "doffing" equipment and to account for certain bonuses in the calculation of overtime rates and pay.

Our Coal Operations subsidiary was party to litigation in which the plaintiffs alleged violations of the Fair Labor Standards Act and state law due to alleged failure to compensate for time "donning" and "doffing" equipment and to account for certain bonuses in the calculation of overtime rates and pay.

In January 2025, we agreed to settle with the plaintiffs such litigation for $ 2.8 million, which was recorded in operating expenses on our consolidated statements of operations for the year ended December 31, 2024.

During the third quarter of 2025, $ 2.7 million was transferred into an escrow account while the settlement is pending court approval of the settlement terms.

At September 30, 2025, $ 0.1 million related to the settlements remains in “accounts payable and accrued liabilities” on our condensed consolidated balance sheets at September 30, 2025.

During the third quarter of 2025, we transferred $ 2.7 million into an escrow account and in late 2025 the settlement terms were approved by the court.

At December 31, 2025, there were no further amounts accrued on our consolidated balance sheet related to this litigation.

AT MARKET AGREEMENT (“ATM”) AND CONFIDENTIALLY MARKETED PUBLIC OFFERING (“CMPO”)

On December 18, 2023, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B.

Riley Securities, Inc.

(the “Agent”), pursuant to which we may issue and sell, from time to time, shares (the “Shares”) of our common stock, par value $ 0.01 per share (the “Common Stock”), with aggregate gross proceeds of up to $ 50.0 million through an “at-the-market” equity offering program under which the Agent will act as sales agent (the “ATM Program”).

Under the Sales Agreement, we or the Agent have the right, by giving five days’ notice, to terminate the Sales Agreement in our and the Agent’s sole discretion.

On December 16, 2025, the Company increased the aggregate gross sales proceeds under the ATM Program from $ 50.0 million to $ 100.0 million by amending the Sales Agreement.

During the three months ended March 31, 2026, we issued 10,832 shares of Common Stock under the ATM Program for net proceeds of $ 0.2 million.

During the year ended December 31, 2025, we issued 697,227 shares of Common Stock under the ATM Program for net proceeds of $ 13.5 million.

In January 2026, the Company delivered written notice to the Agent to terminate the Sales Agreement effective January 18, 2026.

As a result of the termination of the Sales Agreement, the Company will not offer or sell any further shares under the ATM Program.

In January 2026, the Company conducted a confidentially marketed public offering (the "CMPO") pursuant to a base prospectus and a final prospectus supplement that were filed with the SEC.

The Company sold a total of 3,194,444 shares of common stock, at a price to the public of $ 18.00 per share for aggregate gross proceeds of approximately $ 57.5 million, including the exercise of the underwriter’s option prior to deducting underwriting discounts, commissions, and other offering expenses of $ 3.7 million.

SUBSEQUENT EVENTS

On May 1, 2026, the Company entered into a Master Power Purchase and Sale Agreement Long-Form Confirmation Letter (the "Capacity PPA") with a subsidiary of a utility.

The Capacity PPA provides for the sale of approximately two -thirds of the Company’s accredited capacity from its Merom Generating Station, commencing in late 2028 and extending through mid-2040, and is expected to generate cumulative revenue in excess of $ 1.0 billion.

The Capacity PPA is subject to customary regulatory approvals, including approval by the Indiana Utility Regulatory Commission (“IURC”).

Completion of the IURC’s review is anticipated in the second half of 2026.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements