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● Deterioration in the global economic conditions, a worldwide financial downturn or negative credit market conditions could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends.
−Removed: ● We have incurred debt under the Paycheck Protection Program in response to the COVID-19 pandemic.
−Removed: The federal government or private plaintiffs may challenge our determination that we meet the requirements for loans under the Paycheck Protection Program.
● We do not enter into long-term sales contracts for our coal and as a result we are exposed to fluctuations in market pricing.
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Risks Related to Environmental, Health, Safety and Other Regulations
−Removed: ● The incoming U.S.
+Added: ● The current U.S.
administration and Congress could enact legislative and regulatory measures that could adversely affect our mining operations or cost structure or our customers’ ability to use coal, which could have a material adverse effect on our financial condition and results of operations.
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In addition, government inspectors in certain circumstances may have the ability to order our operations to be shut down based on safety considerations.
−Removed: ● We have reclamation, mine closing, and related environmental obligations under the Surface Mining Control and Reclamation Act.
+Added: ● We have reclamation, mine closing, and related environmental obligations under the SMCRA.
If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated.
1 unchanged sentence
● Our ability to pay dividends may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by restrictions in any future debt instruments and by additional factors unrelated to our profitability.
−Removed: ● Our significant stockholders have the ability to direct the voting of a majority of the voting power of our common stock, and their interests may conflict with those of our other stockholders.
● Your percentage of ownership in us may be diluted in the future.
● Certain of our directors have significant duties with, and spend significant time serving, entities that may compete with us in seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities.
−Removed: ● Our significant stockholders and their affiliates are not limited in their ability to compete with us, and the corporate opportunity provisions in our amended and restated certificate of incorporation (our “Charter”) could enable our significant stockholders to benefit from corporate opportunities that might otherwise be available to us.
Risks Related to Our Business
The impact of the spread of COVID-19 and the measures taken to mitigate it are adversely affecting our business, operations and financial condition.
−Removed: The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption during 2020.
+Added: The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption since 2020 and continuing into 2022.
In response to the COVID-19 pandemic, governments worldwide placed significant restrictions on both domestic and international travel and took action to restrict the movement of people and suspend some business operations.
Lockdowns, travel restrictions and restrictions on public gatherings, coupled with the spread and impact of the COVID-19 pandemic, resulted in a significant worldwide economic slowdown.
−Removed: In certain cases, states that had begun taking steps to reopen their economies experienced a subsequent surge in cases of COVID-19, causing these states to cease such reopening measures in some cases and reinstitute restrictions in others.
−Removed: Rates of COVID-19 contractions have worsened in the United States during the winter months, and will likely cause federal, state and local governments to impose more severe restrictions on business and social activities.
+Added: At multiple stages in 2021, states that had begun taking steps to reopen their economies experienced a subsequent surge in cases of COVID-19, causing these states to cease such reopening measures in some cases and reinstitute restrictions in others.
+Added: Rates of COVID-19 contractions have caused federal, state and local governments to impose restrictions on business and social activities.
In the event governments impose such restrictions, the recovery of the economy may be further curtailed.
−Removed: These social and governmental responses have caused a significant slowdown in the global economy and financial markets, and the current and anticipated economic impact of these actions has caused declines in many commodity prices, including a decline in metallurgical coal prices, and significant decline in the demand for steel.
+Added: These social and governmental responses have caused a significant slowdown in the global economy and financial markets, and the current and anticipated economic impact of these actions has caused volatility in many commodity prices, including intermittent declines and increases in metallurgical coal prices, and, at times, significant decline in the demand for steel.
The extent of the impact of the COVID-19 pandemic on our business and financial results will continue to depend on numerous evolving factors that we are not able to accurately predict, including the duration and scope of the pandemic, global economic conditions during and after the pandemic, governmental actions that have been taken, or may be taken in the future, in response to the pandemic, the development and availability of treatments and vaccines and extent to which these treatments and vaccines may remain effective as potential new strains of the coronavirus emerge, and changes in consumer behavior in response to the pandemic, some of which may be more than just temporary.
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The pandemic has resulted in widespread adverse impacts on our employees, customers, suppliers and other parties with whom we have business relations.
−Removed: Our actions have included:
−Removed: ● an operational furlough of approximately 182 employees at the Elk Creek mining complex in West Virginia for most of the month of April 2020;
−Removed: ● a one week operational furlough of approximately 157 employees at the Elk Creek mining complex in July 2020;
−Removed: ● the partial closure of our Berwind low volatile development mine complex affecting approximately 44 employees effective in July 2020;
−Removed: ● a reduction or deferral of non-essential capital expenditures to adapt to the current market conditions.
−Removed: Two customers declared a material adverse change or force majeure under their contracts with us and reduced or delayed their planned volumes of purchases of metallurgical coal from us for 2020 because of COVID-19.
−Removed: These delays or curtailments affected approximately 10% or 200,000 tons of our total contracted sales volumes for 2020 all of which was placed into the lower priced spot market.
−Removed: These actions by customers may result in some disputes and could strain our relations with customers and others.
−Removed: If and to the extent these actions result in material modifications or cancellations of the underlying contracts, or
−Removed: non-renewal of contracts, our business, financial condition, cash flows and results of operations could be materially adversely affected.
+Added: Actions by customers may result in some disputes and could strain our relations with customers and others.
+Added: If and to the extent these actions result in material modifications or cancellations of the underlying contracts, or non-renewal of contracts, our business, financial condition, cash flows and results of operations could be materially adversely affected.
As the COVID-19 pandemic and government responses are rapidly evolving, the extent of the impact on domestic coal companies remains unknown.
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Restrictions of this nature have caused, and likely will continue to cause, us, our suppliers and other business counterparties to experience operational delays and delays in the delivery of materials and supplies that are sourced from around the globe, and have caused, and likely will continue to cause, milestones or deadlines relating to various projects to be missed.
−Removed: We have also modified certain business and workforce practices (including those related to employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences) to conform to government restrictions and best practices encouraged by governmental and regulatory authorities.
+Added: We have also modified certain business and workforce practices (including those related to employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences) to conform to government restrictions
+Added: and best practices encouraged by governmental and regulatory authorities.
However, the quarantine of personnel or the inability to access our facilities could adversely affect our operations.
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The balance due from these customers at December 31, 2021 was approximately 58% of total accounts receivable.
−Removed: In 2020, two of these customers declared force majeure with respect to or curtailed their contractual obligations to purchase metallurgical coal from us due to the economic impacts of COVID-19.
−Removed: These reductions and delays lowered our total contracted sales volumes for 2020 by approximately 10% or almost 200,000 tons.
−Removed: Based on the current economic environment, it is possible that a portion of our contractual commitments for 2021 could be similarly delayed or curtailed, and we are not currently able to anticipate the impact such curtailments or delays could have on our business, financial condition, results of operations or cash flows.
There are inherent risks whenever a significant percentage of total revenues are concentrated with a limited number of customers.
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A significant reduction in the demand for steel products would reduce the demand for metallurgical coal, which would have a material adverse effect on our business, financial condition, cash flows and results of operations.
−Removed: Similarly, if less expensive ingredients could be used in substitution for metallurgical coal in the integrated steel mill process, the demand for metallurgical coal would materially decrease, which would also materially adversely affect demand for our metallurgical coal.
−Removed: Metallurgical coal markets weakened significantly beginning in 2019 as certain China ports placed restrictions on imported coal and weakened further in 2020 due to the economic impacts of the COVID-19 pandemic.
−Removed: Between these import restrictions and the economic impacts of the pandemic, concerns about the stability of the global economy and the ongoing trade dispute between China and the U.S., metallurgical coal prices dropped meaningfully in 2019 and 2020.
+Added: Similarly, if less expensive
+Added: ingredients could be used in substitution for metallurgical coal in the integrated steel mill process, the demand for metallurgical coal would materially decrease, which would also materially adversely affect demand for our metallurgical coal.
Our export customers, excluding Canada, include foreign steel producers who may be affected by the tariffs to the extent their production is imported into the U.S.
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Renewed or continued weakness in the economic conditions of any of the industries served by prospective customers could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
−Removed: We have incurred debt under the Paycheck Protection Program in response to the COVID-19 pandemic.
−Removed: The federal government or private plaintiffs may challenge our determination that we meet the requirements for loans under the Paycheck Protection Program.
−Removed: On April 20, 2020, we received loan proceeds in the amount of approximately $8.4 million under the Paycheck Protection Program (“PPP”) from KeyBank, as lender.
−Removed: In order to obtain the loan, we made a certification to the SBA that the then-current economic uncertainty, including uncertainty in the capital markets, made the loan request necessary to support the ongoing operations of the Company.
−Removed: On April 23, 2020, the SBA issued additional guidance on eligibility for the PPP (the “FAQs”), expressing its view that a public company with substantial market value and access to capital markets will not likely be able to make the required certification in good faith.
−Removed: The SBA noted that such a company should be prepared to demonstrate to the SBA the basis for such company’s certification.
−Removed: Further, on April 28, 2020, Treasury Secretary Mnuchin advised that all companies that have been extended PPP loans in excess of $2 million will be audited.
−Removed: We believe, in light of the FAQs, that we have met the required good faith certification requirements and continue to meet the eligibility requirements for a PPP loan, and we have applied for forgiveness of our PPP loan.
−Removed: However, the federal government or a private plaintiff may disagree and assert otherwise.
−Removed: Any such contest with the federal government or third party action as a result of the PPP loan may require us to incur significant legal, accounting
−Removed: and related fees.
−Removed: In addition, if it was ultimately determined that the certifications we made in connection with the PPP loan were not in good faith, it may result in civil and criminal penalties, which could have a material adverse effect on our liquidity and financial condition.
−Removed: The SBA continues to develop and issue new and updated guidance regarding the PPP loans application process, including guidance regarding required borrower certifications and requirements for forgiveness of loans made under the program.
−Removed: We continue to track the guidance as it is released and assess and re-assess various aspects of its application as necessary based on the guidance.
−Removed: While we believe we have used loan proceeds for qualifying expenses, given the evolving nature of the guidance, it is possible that future changes in the rules and regulations regarding PPP loans, or the SBA’s interpretation thereof, could affect whether the PPP loan is ultimately forgiven.
−Removed: Our application for forgiveness was approved by KeyBank and is currently being reviewed by the SBA, but there is no assurance that the SBA will approve the application for forgiveness.
We do not enter into long-term sales contracts for our coal and as a result we are exposed to fluctuations in market pricing.
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The costs of establishing the infrastructure necessary to enable us to continue to ramp up our mining operations will be significant.
−Removed: We have constructed preparation and loading facilities at our Elk Creek mining complex.
−Removed: Our Berwind mine will remain under development until we reach our targeted coal reserves in the Pocahontas No.
−Removed: That coal is currently, and is planned to continue to be, washed at our active Knox Creek plant.
+Added: We have constructed preparation and loading facilities at our Elk Creek Complex.
+Added: Our Berwind Complex will remain under development until we reach our full targeted annual coal production in the Pocahontas No.
+Added: That coal is currently, and is planned to continue to be, washed at our active Knox Creek plant until our Berwind plant is fully up and running later this year.
At our RAM Mine, we may require access to either newly constructed preparation and loading facilities or arrangements with third parties to process and load our coal.
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For these reasons, estimates of coal reserves may vary substantially.
−Removed: Actual production, revenues and expenditures with respect to our future coal reserves may vary from estimates, and these variances may be material.
+Added: Actual production, revenues and
+Added: expenditures with respect to our future coal reserves may vary from estimates, and these variances may be material.
As a result, our estimates may not accurately reflect our actual future coal reserves.
+Added: Additionally, our reserve estimates may be adversely affected by our adoption and application of the SEC’s recent rule amendments revising property disclosure requirements for publicly traded mining companies.
Our inability to acquire additional coal reserves that are economically recoverable may have a material adverse effect on our future profitability.
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If we fail to acquire or develop sufficient additional reserves over the long term to replace the reserves depleted by our production, our existing reserves could eventually be exhausted.
−Removed: Our multiple coal quality levels and the need to send test shipments to prospective customers may negatively impact our ability to further develop our customer base.
−Removed: Customers typically request test shipments of coal in advance of entering into coal sales agreements which requires that we provide coal quality to meet customer specifications.
−Removed: If we experience delays in the delivery of test shipments, it could negatively impact our ability to develop our customer base.
We are dependent on contractors for the successful completion of the development of our properties.
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Underground mining and related processing activities present inherent risks of injury to persons and damage to property and equipment.
−Removed: Our mines are subject to a number of operating risks that could disrupt operations, decrease production and increase the cost of mining for varying lengths of time, thereby adversely affecting our operating results.
+Added: Our mines are subject to a number of operating risks that could disrupt operations,
+Added: decrease production and increase the cost of mining for varying lengths of time, thereby adversely affecting our operating results.
In addition, if coal production declines, we may not be able to produce sufficient amounts of coal to deliver under future sales contracts.
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Currently, all of our operations are conducted in a single geographic region in the eastern United States in the states of Pennsylvania, Virginia and West Virginia.
−Removed: The geographic concentration of our operations may disproportionately expose us to disruptions in our operations if the region experiences severe weather, transportation capacity constraints, constraints on the availability of required equipment, facilities, personnel or services, significant governmental regulation or natural disasters.
+Added: The geographic concentration of our operations may disproportionately expose us to disruptions in our operations if the region experiences severe weather, transportation capacity constraints,
+Added: constraints on the availability of required equipment, facilities, personnel or services, significant governmental regulation, natural disasters, pandemics (such as COVID-19) or interruption of transportation or other events that impact the region in which we operate or its surrounding areas.
If any of these factors were to impact the region in which we operate more than other coal producing regions, our business, financial condition, results of operations and cash flows will be adversely affected relative to other mining companies that have a more geographically diversified asset portfolio.
−Removed: In addition, scientists have warned that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts and floods and other climatic events.
−Removed: If these warnings are correct, and if any such effects were to occur in areas where we or our customers operate, they could have an adverse effect on our business, financial condition and cash flows.
+Added: In addition, weather conditions associated with climate change, such as increased frequency and severity of storms, droughts and floods and other severe weather events, may impact our operations, personnel, physical assets, supply chain, distribution chain, and the cost of availability of insurance.
+Added: If any such effects were to occur in areas where we or our customers operate, they could have an adverse effect on our business, financial condition and cash flows.
+Added: Our ability to mitigate the adverse physical impacts of climate change depends in part upon our disaster preparedness and response and business continuity planning.
The availability and reliability of transportation facilities and fluctuations in transportation costs could affect the demand for our coal or impair our ability to supply coal to prospective customers.
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If any of these pieces of equipment or facilities suffered major damage or were destroyed by fire, abnormal wear, flooding, incorrect operation or otherwise, we may be unable to replace or repair them in a timely manner or at a reasonable cost, which would impact our ability to produce and transport coal and materially and adversely affect our business, results of operations, financial condition and cash flows.
−Removed: Moreover, the Mine Safety and Health Administration (“MSHA”) and other regulatory agencies sometimes make changes with regards to requirements for pieces of equipment.
+Added: Moreover, the MSHA and other regulatory agencies sometimes make changes with regards to requirements for pieces of equipment.
Such changes could cause delays if manufacturers and suppliers are unable to make the required changes in compliance with mandated deadlines.
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Coal mined from our operations is subject to testing by prospective customers for its ability to meet various specifications and to work satisfactorily in their ovens and other facilities prior to entering into contracts for purchase (which are typically short-term orders having terms of one year or less).
−Removed: If we are unable to successfully test our coals or enter into new contracts for the sale of our coal, our ability to achieve profitability would be materially adversely affected.
+Added: If we are unable to successfully test our coals or enter into new contracts for the sale of our coal, our ability to achieve profitability would be materially adversely
Once we enter into contracts, if a substantial portion of our sales contracts are modified or terminated and we are unable to replace the contracts (or if new contracts are priced at lower levels), our results of operations would be adversely affected, perhaps materially.
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Our inability to collect payment from counterparties to our sales contracts may materially adversely affect our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
−Removed: Decreases in demand for electricity and changes in coal consumption patterns of U.S.
−Removed: electric power generators could adversely affect our business.
−Removed: While demand for metallurgical coal is not closely linked to domestic demand for electricity, we anticipate that the incidental production of thermal coal may generate up to 5% of our tons sold annually.
−Removed: Any changes in coal consumption by electric power generators in the United States would likely impact our business over the long term.
−Removed: The low price of natural gas in recent years has resulted, in many instances, in domestic electric generators increasing natural gas consumption while decreasing coal consumption.
−Removed: Federal and state mandates for increased use of electricity derived from renewable energy sources, such as the Clean Power Plan (“CPP”), also affect demand for our thermal coal.
−Removed: A decrease in coal consumption by the electric power generation industry could adversely affect the price
−Removed: of coal, which could have a material adverse effect on its business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
−Removed: Changes in the coal industry that affect our prospective customers, such as those caused by decreased electricity demand and increased competition, could also adversely affect our business.
−Removed: Indirect competition from natural gas fired plants that are relatively less expensive to construct and less difficult to permit has the most potential to displace a significant amount of coal fired electric power generation in the near term, particularly older, less efficient coal fired powered generators.
−Removed: In addition, uncertainty caused by federal and state regulations could cause thermal coal customers to be uncertain of their coal requirements in future years, which could adversely affect our ability to sell coal to such prospective customers under multi-year sales contracts.
−Removed: This could have a material adverse effect on our business, financial condition, cash flows.
We may be unsuccessful in integrating the operations of any future acquisitions, including acquisitions involving new lines of business, with our existing operations, and in realizing all or any part of the anticipated benefits of any such acquisitions.
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Also, following an acquisition, we may discover previously unknown liabilities associated with the acquired business or assets for which we have no recourse under applicable indemnification provisions.
−Removed: If an acquired business or new line of business generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our results of operations may be materially adversely affected.
+Added: acquired business or new line of business generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our results of operations may be materially adversely affected.
To maintain and grow our business, we will be required to make substantial capital expenditures.
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Using cash from our operations will reduce cash available for maintaining or increasing our operating activities and paying dividends to our stockholders.
−Removed: Our ability to obtain bank financing or our ability to access the capital markets for future equity or debt offerings may be limited by our financial
−Removed: condition at the time of any such financing or offering and the covenants in our future debt agreements, as well as by general economic conditions, contingencies and uncertainties that are beyond our control.
+Added: Our ability to obtain bank financing or our ability to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering and the covenants in our future debt agreements, as well as by general economic conditions, contingencies and uncertainties that are beyond our control, such as the COVID-19 pandemic.
In addition, incurring debt may significantly increase our interest expense and financial leverage, and issuing additional equity securities may result in significant stockholder dilution.
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dollar declines relative to foreign currencies with respect to certain imported supplies or other products, our operating expenses could increase.
−Removed: Any of the foregoing events could materially and adversely impact our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
+Added: Any of the foregoing
+Added: events could materially and adversely impact our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments.
1 unchanged sentence
We have no significant assets other than the equity interests in our subsidiaries.
−Removed: As a result, our ability to pay our obligations and to make dividend payments, should we choose to do so in the future, depends entirely on our subsidiaries and their ability to distribute funds to us.
+Added: As a result, our ability to pay our obligations and to make dividend payments, depends entirely on our subsidiaries and their ability to distribute funds to us.
The ability of a subsidiary to make these distributions could be affected by a claim or other action by a third-party, including a creditor, or by the law of their respective jurisdictions of formation which regulates the payment of dividends.
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Although the Policy Advisory was rescinded in October 2017, certain states, including Virginia, had previously announced that it would no longer accept self-bonding to secure reclamation obligations under the state mining laws.
−Removed: Individually and collectively, these and future revised financial assurance
−Removed: requirements may lead to increased demand for other forms of financial assurance, which may strain capacity for those instruments and increase our costs of obtaining and maintaining the amounts of financial assurance needed for our operations, which may delay the timing for and increase the costs of obtaining this financial assurance.
+Added: Individually and collectively, these and future revised financial assurance requirements may lead to increased demand for other forms of financial assurance, which may strain capacity for those instruments and increase our costs of obtaining and maintaining the amounts of financial assurance needed for our operations, which may delay the timing for and increase the costs of obtaining this financial assurance.
We use surety bonds, trusts and letters of credit to provide financial assurance for certain transactions and business activities.
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Horizontal wells with multiple laterals extending from the well pad may access larger oil and natural gas reserves than a vertical well, which would typically result in a higher cost to acquire.
−Removed: The cost associated with purchasing oil and natural gas wells that are in the path of our coal mining activities may make mining through those wells uneconomical, thereby effectively causing a loss of significant portions of our coal reserves, which could materially and adversely affect our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
+Added: The cost associated with purchasing oil and natural gas wells that are in the path of our coal mining activities may make mining through those wells uneconomical, thereby effectively causing a loss of significant portions of our coal reserves, which could
+Added: materially and adversely affect our business, financial condition, results of operations, cash flows and ability to pay dividends to our stockholders.
Defects in title or loss of any leasehold interests in our properties could limit our ability to conduct mining operations on these properties or result in significant unanticipated costs.
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Efficient coal mining using modern techniques and equipment requires skilled laborers, preferably with at least a year of experience and proficiency in multiple mining tasks.
+Added: The demand for skilled employees sometimes causes a significant constriction of the labor supply resulting in higher labor costs.
+Added: When met coal producers compete for skilled miners, recruiting challenges can occur and employee turnover rates can increase, which negatively affect operating efficiency and costs.
In the event there is a shortage of experienced labor, it could have an adverse impact on our labor productivity and our ability to expand production in the event there is an increase in the demand for our coal.
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An inability for U.S.
−Removed: metallurgical coal suppliers to access international markets would likely result in an oversupply of metallurgical
−Removed: coal in the domestic market, resulting in a decrease in prices, which could have a material adverse effect on our business, financial condition, cash flows and ability to pay dividends to our stockholders.
+Added: metallurgical coal suppliers to access international markets would likely result in an oversupply of metallurgical coal in the domestic market, resulting in a decrease in prices, which could have a material adverse effect on our business, financial condition, cash flows and ability to pay dividends to our stockholders.
+Added: We and our significant stockholders are subject to the Applicant Violator System.
+Added: Under the SMCRA and its state law counterparts, all coal mining applications must include mandatory “ownership and control” information, which generally includes listing the names of our officers and directors, and our principal stockholders owning 10 percent or more of our voting shares, among others.
+Added: Ownership and control reporting requirements are designed to allow regulatory review of any entities or persons deemed to have ownership or control of a coal mine, and bars the granting of a coal mining permit to any such entity or person (including any “owner and controller”) who has had a mining permit revoked or suspended, or a bond or similar security forfeited within the five-year period preceding a permit application or application for a permit revision.
+Added: Regulatory agencies also block the issuance of permits to an applicant who, or whose owner and controller, has permit violations outstanding that have not been timely abated.
+Added: A federal database, known as the Applicant Violator System, is maintained for this purpose.
+Added: Certain relationships are presumed to constitute ownership or control, including the following:
+Added: being an officer or director of an entity;
+Added: being the operator of the coal mining operation;
+Added: having the ability to commit the financial or real property assets or working resources of the permittee or operator;
+Added: based on the instruments of ownership or the voting securities of a corporate entity, owning of record 10% or more of the mining operator, among others.
+Added: This presumption, in most cases, can be rebutted where the person or entity can demonstrate that it in fact does not or did not have authority directly or indirectly to determine the manner in which the relevant coal mining operation is conducted.
+Added: An ownership and control notice must be filed by us each time an entity obtains a 10% or greater interest in us.
+Added: If we have unabated violations of the SMCRA or its state law counterparts, have a coal mining permit suspended or revoked, or forfeit a reclamation bond, we and our “owners and controllers,” as discussed above, may be prohibited from obtaining new coal mining permits, or amendments to existing permits, until such violations of law are corrected.
+Added: This is known as being “permit-blocked.” Additionally, Yorktown and Mr.
+Added: Atkins are each currently deemed an “owner or controller” of a number of other mining
+Added: as such, we could be permit-blocked based upon the violations of or permit-blocked status of an “owner or controller” of us.
+Added: This could adversely affect production from our properties.
+Added: We may be subject to additional limitations on our ability to conduct mining operations due to federal jurisdiction.
+Added: We may conduct some underground mining activities on properties that are within the designated boundary of federally protected lands or national forests where the above-mentioned restrictions within the meaning of the SMCRA could apply.
+Added: Federal court decisions could pose a potential restriction on underground mining within 100 feet of a public road as well as other restrictions.
+Added: If these SMCRA restrictions ultimately apply to underground mining, considerable uncertainty would exist about the nature and extent of this restriction.
+Added: While it could remain possible to obtain permits for underground mining operations in these areas even where this 100-foot restriction was applied, the time and expense of that permitting process would be likely to increase significantly, and the restrictions placed on the mining of those properties could adversely affect our costs.
Risks Related to Environmental, Health, Safety and Other Regulations
−Removed: The incoming U.S.
+Added: The current U.S.
administration and Congress could enact legislative and regulatory measures that could adversely affect our mining operations or cost structure or our customers’ ability to use coal, which could have a material adverse effect on our financial condition and results of operations.
−Removed: The President’s proposed climate plan includes rejoining the Paris climate agreement, as well as a target of achieving carbon-free electricity generation in the United States by 2035 and net zero greenhouse gas emissions economy-wide by 2050.
−Removed: The plan calls for establishment of technology-neutral Energy Efficiency and Clean Electricity Standards, accompanied by clean energy tax credits and other incentives for utilities and grid operators to generate electricity with renewable energy.
+Added: In January 2021, President Biden issued written notification to the United Nations of the United States’ intention to rejoin the Paris climate agreement (which took effect in February 2021) and set a target of achieving carbon-free electricity generation in the United States by 2035 and net zero greenhouse gas emissions economy-wide by 2050.
+Added: The Biden Administration’s climate goals include the establishment of technology-neutral Energy Efficiency and Clean Electricity Standards, accompanied by clean energy tax credits and other incentives for utilities and grid operators to generate electricity with renewable energy.
+Added: An integral part of the goals, funding under the Build Back Better legislation, is in flux after recent opposition in the U.S.
Depending upon what legislative and regulatory proposals in pursuit of these targets come into effect, there could be increased pressure on U.S.
utilities and power generators to reduce greenhouse gas emissions, accelerating the decline in demand for coal in the United States.
−Removed: In addition, the Biden administration has indicated that it will unwind a number of regulatory rollbacks enacted or proposed by the Trump administration, including, among others, the Affordable Clean Energy Rule, the Navigable Waters Protection Rule, the proposed rule for the disposal of coal combustion residuals, and the National Environmental Policy Act overhaul, or otherwise impose and enforce more stringent permitting or other requirements, including those relating to reclamation, water quality, water availability and other environmental matters.
+Added: In addition, the Biden Administration has taken measures to unwind a number of regulatory rollbacks enacted or proposed by the Trump administration, including, among others, the ACE Rule, the NWPR, the CCR, and the proposed NEPA overhaul, many of which are currently the subject of ongoing litigation.
+Added: On January 11, 2022, the EPA announced several actions with respect to the coal combustion residuals rules, including reiterating that surface impoundments cannot be closed with coal ash in contact with groundwater (in connection with proposed determinations to deny closure deadline extensions) and establishing a federal permitting scheme for the disposal of coal ash and establish regulations for legacy coal ash surface impoundments.
New, more stringent legislation or regulations related to the protection of the environment, health and safety or the reduction of greenhouse gas emissions, as well as changes in the interpretation and enforcement of such laws and regulations, may require us or our customers to change operations significantly or incur increased costs, which may adversely affect our mining operations, cost structure or our customers’ ability to use coal.
3 unchanged sentences
There is widespread concern about the contributions of human activity to such changes, especially through the emission of GHGs.
+Added: Numerous reports, such as Sixth Assessment Report of the Intergovernmental Panel on Climate Change, have further raised concern about the impacts of fossil fuel combustion on global climate issues.
There are three primary sources of GHGs associated with the coal industry.
1 unchanged sentence
Second, combustion of fuel by equipment used in coal production and to transport our coal to our customers is a source of GHGs.
−Removed: Third, coal mining itself can release methane, which is considered to be a more potent GHG than CO2, directly into the atmosphere.
+Added: Third, coal mining itself can release methane, which is considered to be a more potent GHG than carbon dioxide, directly into the atmosphere.
These emissions from coal consumption, transportation and production are subject to pending and proposed regulation as part of initiatives to address global climate change.
−Removed: As a result, numerous proposals have been made and are likely to continue to be made at the international, national, regional and state levels of government to monitor and limit emissions of GHGs.
+Added: As a result, numerous proposals have been made and are likely to continue to be made at the international, national, regional, state and local levels of government to monitor and limit emissions of GHGs.
Collectively, these initiatives could result in higher electric costs to our customers or lower the demand for coal used in electric generation, which could in turn adversely impact our business.
They could also result in direct regulation of the GHGs produced by our operations.
−Removed: See “Business—Environmental and Other Regulatory Matters—Global Climate Change.”
+Added: See "Business—Environmental and Other Regulatory Matters—Global Climate Change.”
At present, we are principally focused on metallurgical coal production, which is not used in connection with the production of power generation.
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The market for our coal may be adversely impacted if comprehensive legislation or regulations focusing on GHG emission reductions are adopted, or if our customers are unable to obtain financing for their operations.
−Removed: The uncertainty over the outcome of litigation challenging the CPP or its replacement, and the extent of future regulation of GHG emissions may inhibit utilities from investing in the building of new coal-fired plants to replace older plants or investing in the upgrading of existing coal-fired plants.
−Removed: Any reduction in the amount of coal consumed by electric power generators as a result of actual or potential regulation of GHG emissions could decrease demand for our coal, thereby reducing our revenues and materially and adversely affecting our business and results of
−Removed: We or prospective customers may also have to invest in CO2 capture and storage technologies in order to burn coal and comply with future GHG emission standards.
−Removed: Current and future government laws, regulations and other legal requirements relating to protection of the environment and natural resources may increase our costs of doing business and may restrict our coal operations.
+Added: The uncertainty over the outcome of ongoing litigation challenging the repeal of both the CPP, and its replacement, the ACE Rule, or its replacement, and the extent of future regulation of GHG emissions may inhibit utilities from investing in the building of new coal-fired plants to replace older plants or investing in the upgrading of existing coal-fired plants.
+Added: Any reduction in the amount of coal consumed by electric power generators as a result of actual or potential regulation of GHG emissions could decrease demand for our coal, thereby reducing our revenues and materially and adversely affecting our business and results of operations.
+Added: We or prospective customers may also have to invest in carbon dioxide capture and storage technologies in order to burn coal and comply with future GHG emission standards.
+Added: Current and future laws, regulations and other legal requirements relating to protection of the environment and natural resources may increase our costs of doing business and may restrict our coal operations.
We and our potential customers are subject to stringent and complex laws, regulations and other legal requirements enacted by federal, state and local authorities relating to protection of the environment and natural resources.
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See “Business—Environmental and Other Regulatory Matters.” Examples include laws and regulations relating to:
−Removed: ● employee health and safety;
+Added: ● occupational health and safety;
● emissions to air and discharges to water;
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In addition, there is the possibility that we could incur substantial costs as a result of violations of environmental laws, judicial interpretations of or rulings on environmental laws or permits, or in connection with the investigation and remediation of environmental contamination.
−Removed: For example, the EPA and several of the states where we operate have, or intend to, propose revised recommended criteria for discharges of selenium regulated under the CWA, which may be more stringent than current criteria.
+Added: For example, the EPA and several of the states where we operate have, or intend to, propose revised
+Added: recommended aquatic life criteria for discharges of selenium regulated under the CWA, which may be more stringent than current criteria.
+Added: The comment period for the EPA’s draft Selenium Technical Support Materials, intended to provide implementation support for states for the recommend selenium aquatic life criterion for freshwater ended on January 3, 2022.
Any additional laws, regulations and other legal requirements enacted or adopted by federal, state and local authorities, or new interpretations of existing legal requirements by regulatory bodies relating to the protection of the environment, including those related to discharges of selenium, could further affect our costs or limit our operations.
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Such claims may arise, for example, out of conditions at sites that we currently own or operate, as well as at sites that we previously owned or operated, or may acquire.
−Removed: Our liability
−Removed: for such claims may be joint and several, so that we may be held responsible for more than our share of the contamination or other damages, or for the entire share.
+Added: Our liability for such claims may be joint and several, so that we may be held responsible for more than our share of the contamination or other damages, or for the entire share.
We maintain coal refuse areas and slurry impoundments as necessary.
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Numerous governmental permits and approvals are required for mining operations.
−Removed: Our operations are principally regulated under permits issued pursuant to SMCRA and the federal CWA.
+Added: Our operations are principally regulated under permits issued pursuant to the SMCRA and the federal CWA.
State and federal regulatory authorities exercise considerable discretion in the timing and scope of permit issuance.
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These delays or denials of environmental permits needed for mining could reduce our production and materially adversely impact our cash flow and results of operations.
−Removed: Prior to discharging any pollutants to waters of the United States, coal mining companies must obtain a National Pollutant Discharge Elimination System (“NPDES”) permit from the appropriate state or federal permitting authority.
+Added: Prior to discharging any pollutants to waters of the United States, coal mining companies must obtain a NPDES permit from the appropriate state or federal permitting authority.
NPDES permits include effluent limitations for discharged pollutants and other terms and conditions, including required monitoring of discharges.
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If we cannot successfully negotiate for land access, we could be denied a permit to mine coal we already own.
−Removed: We and our significant stockholders are subject to the Applicant Violator System.
−Removed: Under SMCRA and its state law counterparts, all coal mining applications must include mandatory “ownership and control” information, which generally includes listing the names of our officers and directors, and our principal stockholders owning 10 percent or more of our voting shares, among others.
−Removed: Ownership and control reporting requirements are designed to allow regulatory review of any entities or persons deemed to have ownership or control of a coal mine, and bars the granting of a coal mining permit to any such entity or person (including any “owner and controller”) who has had a mining permit revoked or suspended, or a bond or similar security forfeited within the five-year period preceding a permit application or application for a permit revision.
−Removed: Regulatory agencies also block the issuance of permits to an applicant who, or whose owner and controller, has permit violations outstanding that have not been timely abated.
−Removed: A federal database, known as the Applicant Violator System, is maintained for this purpose.
−Removed: Certain relationships are presumed to constitute ownership or control, including the following:
−Removed: being an officer or director of an entity;
−Removed: being the operator of the coal mining operation;
−Removed: having the ability to commit the financial or real property assets or working resources of the permittee or operator;
−Removed: based on the instruments of ownership or the voting securities of a corporate entity, owning of record 10% or more of the mining operator, among others.
−Removed: This presumption, in most cases, can be rebutted where the person or entity can demonstrate that it in fact does not or did not have authority directly or indirectly to determine the manner in which the relevant coal mining operation is conducted.
−Removed: An ownership and control notice must be filed by us each time an entity obtains a 10% or greater interest in us.
−Removed: If we have unabated violations of SMCRA or its state law counterparts, have a coal mining permit suspended or revoked, or forfeit a reclamation bond, we and our “owners and controllers,” as discussed above, may be prohibited from obtaining new coal mining permits, or amendments to existing permits, until such violations of law are corrected.
−Removed: This is known as being “permit-blocked.” Additionally, Yorktown and Mr.
−Removed: Atkins are each currently deemed an “owner or controller” of a number of other mining companies;
−Removed: as such, we could be permit-blocked based upon the violations of or permit-blocked status of an “owner or controller” of us.
−Removed: This could adversely affect production from our properties.
−Removed: We may be subject to additional limitations on our ability to conduct mining operations due to federal jurisdiction.
−Removed: We may conduct some underground mining activities on properties that are within the designated boundary of federally protected lands or national forests where the above-mentioned restrictions within the meaning of SMCRA could apply.
−Removed: Federal court decisions could pose a potential restriction on underground mining within 100 feet of a public road as well as other restrictions.
−Removed: If these SMCRA restrictions ultimately apply to underground mining, considerable uncertainty would exist about the nature and extent of this restriction.
−Removed: While it could remain possible to obtain permits for underground mining operations in these areas even where this 100-foot restriction was applied, the time and expense of that permitting process would be likely to increase significantly, and the restrictions placed on the mining of those properties could adversely affect our costs.
−Removed: Our customers are subject to extensive existing and future government laws, regulations and other legal requirements relating to protection of the environment, which could negatively impact our business and the market for our products.
+Added: Federal or state regulatory agencies have the authority to order certain of our mines to be temporarily or permanently closed under certain circumstances, which could materially and adversely affect our ability to meet our customers’ demands.
+Added: Federal or state regulatory agencies have the authority, under certain circumstances following significant health and safety incidents, such as fatalities, to order a mine to be temporarily or permanently closed.
+Added: If this occurred, we may be required to incur capital expenditures to re-open the mine.
+Added: In the event that these agencies order the closing of our mines, our coal sales contracts generally permit us to issue force majeure notices which suspend our obligations to deliver coal under these contracts.
+Added: However, our customers may challenge our issuances of force majeure notices.
+Added: If these challenges are successful, we may have to purchase coal from third-party sources, if it is available, to fulfill these obligations, incur capital expenditures to re-open the mines and/or negotiate settlements with the customers, which may include price reductions, the reduction of commitments, the extension of time for delivery or the termination of customers’ contracts.
+Added: Any of these actions could have a material adverse effect on our business and results of operations.
+Added: Our customers are subject to extensive existing and future laws, regulations and other legal requirements relating to protection of the environment, which could negatively impact our business and the market for our products.
Coal contains impurities, including sulfur, mercury, chlorine and other elements or compounds, many of which are released into the air when coal is burned.
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In addition, considerable uncertainty is associated with new air emissions initiatives that may require significant emissions control expenditures for many coal-fired power plants.
−Removed: As a result, some of our prospective customers may switch to other fuels that generate fewer of these emissions or may install more effective pollution control equipment
−Removed: that reduces the need for low-sulfur coal.
+Added: As a result, some of our prospective customers may switch to other fuels that generate fewer of these emissions or may install more effective pollution control equipment that reduces the need for low-sulfur coal.
Any further switching of fuel sources away from coal, closure of existing coal-fired power plants, or reduced construction of new coal-fired power plants could have a material adverse effect on demand for, and prices received for, our coal.
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Apart from actual and potential regulation of air emissions and solid wastes from coal-fired plants, state and federal mandates for increased use of electricity from renewable energy sources could have an impact on the market for our coal.
−Removed: Several states, including Pennsylvania and Virginia, have enacted legislative mandates requiring electricity suppliers to use renewable energy sources to generate a certain percentage of power.
−Removed: Possible advances in technologies and incentives, such as tax credits, to enhance the economics of renewable energy sources could make these sources more competitive with coal.
−Removed: Any reductions in the amount of coal consumed by electric power generators as a result of current or new standards for the emission of impurities, or current or new incentives to switch to renewable fuels or renewable energy sources, such as the ACE rule and various state programs, could reduce the demand for our coal, thereby reducing our revenues and adversely affecting our business, cash flows, results of operations and our ability to pay dividends to our stockholders.
−Removed: Environmental activism and initiatives aimed at limiting climate change and a reduction of air pollutants could interfere with our business activities, operations and ability to access capital sources.
−Removed: Participants in the coal mining industry are frequently targeted by environmental activist groups that openly attempt to disrupt the industry.
+Added: Many states, including Pennsylvania and Virginia, have enacted legislative mandates requiring electricity suppliers to use renewable energy sources to generate a certain percentage of power.
+Added: Possible advances in technologies and
+Added: incentives, such as tax credits, to enhance the economics of renewable energy sources could make these sources more competitive with coal.
+Added: Any reductions in the amount of coal consumed by electric power generators as a result of current or new standards for the emission of impurities, or current or new incentives to switch to renewable fuels or renewable energy sources could reduce the demand for our coal, thereby reducing our revenues and adversely affecting our business, cash flows, results of operations and our ability to pay dividends to our stockholders.
+Added: Activism and initiatives aimed at limiting climate change and a reduction of air pollutants could interfere with our business activities, operations and ability to access capital sources.
+Added: Numerous activist groups are devoting resources to anti-coal activities to minimize or eliminate the production of or use of coal as a source of electricity generation, domestically and internationally.
+Added: Participants in the coal mining industry are frequently targeted by activist groups that openly attempt to disrupt the industry.
For example, Greenpeace International filed a letter with the SEC alleging that one coal mining company’s filings relating to a proposed public offering of securities may contain incomplete and misleading disclosures regarding the risks of investing in the coal market.
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It is possible that we could continue to be the target of similar actions in the future, including when we attempt to grow our business through acquisitions or commence new mining operations.
−Removed: If that were to happen, our ability to operate our business or raise capital could be materially and adversely impacted.
−Removed: In addition, there have also been efforts in recent years to influence the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities and other groups, promoting the divestment of fossil fuel equities and also pressuring lenders to limit funding to companies engaged in the extraction of fossil fuel reserves.
−Removed: In California, for example, legislation was signed into law to require the state’s pension funds to divest investments in companies that generate 50% or more of their revenue from coal mining by July 2017.
−Removed: Several large investment banks also announced that they had adopted climate change guidelines for lenders.
+Added: Activist groups have also brought lawsuits challenging the issuance of individual coal leases, historical and pending regulatory approvals, permits and processes that are necessary to conduct coal mining operations or to operate coal-fueled power plants.
+Added: Activism could materially and adversely impact our ability to operate our business or raise capital.
+Added: In addition, there have also been efforts in recent years to influence the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities and other groups, promoting the divestment of fossil fuel equities;
+Added: encouraging the consideration of environmental, social and governance (“ESG”) practices and ESG ratings of companies in a manner that may negatively affect coal companies;
+Added: and also pressuring lenders to limit funding to companies engaged in the extraction of fossil fuel reserves.
+Added: In California, for example, legislation was signed into law in September 2015 to require the state’s pension funds to divest investments in companies that generate 50% or more of their revenue from coal mining by July 2017.
+Added: Additionally, Maine passed a law in June 2021 requiring the state pension system to divest holdings in coal, petroleum, natural gas and related products by 2026, and the New York State Common Retirement Fund has and is continuing to divest from coal assets.
+Added: Several large investment banks have adopted climate change guidelines for lenders.
The guidelines require the evaluation of carbon risks in the financing of electric power generation plants, which may make it more difficult for utilities to obtain financing for coal-fired plants.
−Removed: In addition, there have also been efforts in recent years affecting the investment community, including investment advisers, sovereign wealth funds, public pension funds, universities and other groups, promoting the divestment of fossil fuel equities, encouraging the consideration of environmental, social and governance (“ESG”) practices of companies in a manner that negatively affects coal companies, and also pressuring lenders to limit funding to companies engaged in the extraction of fossil fuel reserves.
The impact of such efforts may adversely affect the demand for and price of securities issued by us, and impact our access to the capital and financial markets.
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Other activist campaigns have urged companies to cease financing coal-driven businesses.
−Removed: A number of investors and asset managers have enacted such policies as a result.
−Removed: For example, in January 2020, an asset manager with over $7 trillion in assets announced that it will begin exiting investments that present high sustainability-related risks, such as thermal coal producers.
+Added: A number of investors and asset managers have enacted such policies as a result, including by beginning to exit investments that present high sustainability-related risks, such as thermal coal producers.
The impact of such efforts may adversely affect the demand for and price of securities issued by us and impact our access to the capital and financial markets.
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In addition, government inspectors in certain circumstances may have the ability to order our operations to be shut down based on safety considerations.
−Removed: The Federal Mine Safety and Health Act of 1977 (the “Mine Act”) and Mine Improvement and New Emergency Response Act (the “MINER Act”), and regulations issued under these federal statutes, impose stringent health and safety standards on mining operations.
−Removed: The regulations that have been adopted under the Mine Act and the MINER Act are comprehensive and affect numerous aspects of mining operations, including training of mine personnel, mining procedures, roof control, ventilation, blasting, use and maintenance of mining equipment, dust and noise control, communications, emergency response procedures, and other matters.
+Added: The Mine Act and MINER Act, and regulations issued under these federal statutes, impose stringent health and safety standards on mining operations.
+Added: The regulations that have been adopted under the Mine Act and the MINER Act are comprehensive and affect numerous aspects of mining operations, including training of mine personnel, mining
+Added: procedures, roof control, ventilation, blasting, use and maintenance of mining equipment, dust and noise control, communications, emergency response procedures, and other matters.
MSHA regularly inspects mines to ensure compliance with regulations promulgated under the Mine Act and MINER Act.
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These changes could have a material impact on our costs expended in association with the federal black lung program.
−Removed: We have reclamation, mine closing, and related environmental obligations under the Surface Mining Control and Reclamation Act.
+Added: We have reclamation, mine closing, and related environmental obligations under the SMCRA.
If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated.
−Removed: SMCRA establishes operational, reclamation and closure standards for our mining operations.
−Removed: SMCRA requires that comprehensive environmental protection and reclamation standards be met during the course of and following completion of mining activities.
−Removed: Permits for all mining operations must be obtained from the OSMRE or, where state regulatory agencies have adopted federally approved state programs under SMCRA, the appropriate state regulatory authority.
−Removed: Our operations are located in states which have achieved primary jurisdiction for enforcement of SMCRA through approved state programs.
+Added: The SMCRA establishes operational, reclamation and closure standards for our mining operations.
+Added: The SMCRA requires that comprehensive environmental protection and reclamation standards be met during the course of and following completion of mining activities.
+Added: Permits for all mining operations must be obtained from the OSMRE or, where state regulatory agencies have adopted federally approved state programs under the SMCRA, the appropriate state regulatory authority.
+Added: Our operations are located in states which have achieved primary jurisdiction for enforcement of the SMCRA through approved state programs.
See “Business—Environmental and Other Regulatory Matters.”
−Removed: In December 2016, OSMRE published the final version of the Stream Protection Rule.
−Removed: The rule became effective in January 2017 but was subsequently “disapproved” pursuant to the CRA.
−Removed: The rule would have impacted both surface and underground mining operations by imposing stricter guidelines on conducting coal mining operations within buffer zones and increasing testing and monitoring requirements related to the quality or quantity of surface water and groundwater or the biological condition of streams.
−Removed: The Stream Protection Rule would also have required the collection of increased premining data about the site of the proposed mining operation and adjacent areas to establish a baseline for evaluation of the impacts of mining and the effectiveness of reclamation associated with returning streams to premining conditions.
−Removed: In addition, SMCRA imposes a reclamation fee on all current mining operations, the proceeds of which are deposited in the AML Fund, which is used to restore unreclaimed and abandoned mine lands mined before 1977.
+Added: In addition, the SMCRA imposes a reclamation fee on all current mining operations, the proceeds of which are deposited in the AML Fund, which is used to restore unreclaimed and abandoned mine lands mined before 1977.
The current per ton fee is $0.224 per ton for surface mined coal and $0.096 per ton for underground mined coal.
−Removed: These fees are currently scheduled to be in effect until September 30, 2021.
+Added: These fees are currently scheduled to be in effect until September 30, 2034, and on November 15, 2021, the Infrastructure Investment and Jobs Act (“IIJA”), which included the Abandoned Mine Land Reclamation Amendments of 2021, extended OSMRE’s statutory authority to collect reclamation fees for an additional 13 years and to reduce the fee rates.
+Added: The OSMRE is currently revising its regulations to reflect the statutory extension of the dates when monies derived from these fees will be available for grant distributions.
+Added: An interim final rule was published on January 14, 2022, along with a request for comment, in order to codify the revisions to reflect the changes from the IIJA.
We accrue for the costs of current mine disturbance and of final mine closure, including the cost of treating mine water discharge where necessary.
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Risks Related to Our Company
−Removed: Our ability to pay dividends may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by restrictions in any future debt instruments and by additional factors unrelated to our profitability.
−Removed: We may pay special and regular quarterly dividends in the future.
−Removed: The declaration and payment of dividends, if any, is subject to the discretion of our board of directors and the requirements of applicable law.
−Removed: The timing and amount of any dividends declared will depend on, among other things:
+Added: Our ability to pay dividends may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by restrictions in debt instruments and by additional factors unrelated to our profitability.
+Added: We may pay additional special and regular quarterly dividends in the future.
+Added: Our ability to pay dividends is subject to the discretion of our board of directors and the requirements of applicable law.
+Added: The timing and amount of dividends declared will depend on, among other things:
(a) our earnings, earnings outlook, financial condition, cash flow, cash requirements and outlook on current and future market conditions, (b) our liquidity, including our ability to obtain debt and equity financing on acceptable terms, (c) restrictive covenants in any future debt instruments and (d) provisions of applicable law governing the payment of dividends.
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The amount of cash we generate from operations and the actual amount of cash we will have available for dividends will vary based upon, among other things:
−Removed: ● risks related to the impact of the 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
−Removed: 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;
+Added: ● risks related to the impact of the 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;
● the development of our properties into producing coal mines;
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We may incur other expenses or liabilities that could reduce or eliminate the cash available for distribution as dividends.
−Removed: In addition, any future financing agreements may prohibit the payment of dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends.
−Removed: In addition, Section 170 of the Delaware General Corporation Law (“DGCL”) allows our board of directors to declare and pay dividends on the shares of our common stock either (i) out of our surplus, as defined in and computed in accordance with the DGCL or (ii) in case there shall be no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
+Added: In addition, financing agreements may prohibit the payment of dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends.
+Added: In addition, Section 170 of the Delaware General Corporation Law (the “DGCL”) allows our board of directors to declare and pay dividends on the shares of our common stock either (i) out of our surplus, as defined in and computed in accordance with the DGCL or (ii) in case there shall be no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
We may not have sufficient surplus or net profits in the future to pay dividends, and our subsidiaries may not have sufficient funds, surplus or net profits to make distributions to us.
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The JOBS Act contains provisions that, among other things, relax certain reporting requirements for “emerging growth companies,” including certain requirements relating to auditing standards and compensation disclosure.
−Removed: We are classified as an emerging growth company.
−Removed: For as long as we are an emerging growth company, which may be as late as our annual report for the fiscal year ending December 31, 2022, unlike other public companies, we will not be required to, among other things, (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, (2) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (3) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise or (4) provide certain disclosure regarding executive compensation required of larger public companies.
−Removed: Our significant stockholders have the ability to direct the voting of a majority of the voting power of our common stock, and their interests may conflict with those of our other stockholders.
−Removed: Our significant stockholders, Yorktown and ECP, collectively own approximately 62% of our common stock, and management and our directors own approximately 15%.
−Removed: As a result, our significant stockholders are able to control matters requiring stockholder approval, including the election of directors, changes to our organizational documents and significant corporate transactions.
−Removed: This concentration of ownership makes it unlikely that any other holder or group of holders of our common stock will be able to affect the way we are managed or the direction of our business.
−Removed: The interests of our significant stockholders with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings and other corporate opportunities and attempts to acquire us, may conflict with the interests of our other stockholders.
−Removed: Given this concentrated ownership, our significant stockholders would have to approve any potential acquisition of us.
−Removed: In addition, certain of our directors are currently employees of our significant stockholders.
−Removed: These directors’ duties as employees of our significant stockholders may conflict with their duties as our directors, and the resolution of these conflicts may not always be in our or your best interest.
−Removed: Furthermore, we entered into a stockholders’ agreement with the significant stockholders in connection with our initial public offering.
−Removed: Among other things, the stockholders’ agreement provides certain funds affiliated with and/or managed by Yorktown and ECP with the right to designate a certain number of nominees to our board of directors until the later of (i) the time at which such stockholder no longer has the right to designate an individual for nomination to the board of directors under the stockholders’ agreement, and (ii) the time at which the significant stockholders cease to hold in aggregate at least 50% of the outstanding shares of our common stock.
−Removed: The existence of a significant stockholder and the stockholders’ agreement may have the effect of deterring hostile takeovers, delaying or preventing changes in control or changes in management or limiting the ability of our other stockholders to approve transactions that they may deem to be in our best interests.
−Removed: Our significant stockholders’ concentration of stock ownership may also adversely affect the trading price of our common stock to the extent investors perceive a disadvantage in owning stock of a company with significant stockholders.
+Added: We are currently classified as an emerging growth company.
+Added: We will no longer be classified as such in our fiscal year ending December 31, 2022.
+Added: At that time, we will be required to, among other things, (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (2) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (3) comply with any new audit rules adopted by the PCAOB unless the SEC determines otherwise or (4) provide certain disclosure regarding executive compensation required of larger public companies.
Your percentage of ownership in us may be diluted in the future.
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Certain of our directors have significant duties with, and spend significant time serving, entities that may compete with us in seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities.
−Removed: Certain of our directors, who are responsible for managing the direction of our operations and acquisition activities, hold positions of responsibility with other entities (including Yorktown- and ECP-affiliated entities) that are in the business of identifying and acquiring coal reserves.
+Added: Certain of our directors, who are responsible for managing the direction of our operations and acquisition activities, hold positions of responsibility with other entities (including Yorktown-affiliated entities) that are in the business of identifying and acquiring coal reserves.
The existing positions held by these directors may give rise to fiduciary or other duties that are in conflict with the duties they owe to us.
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For additional discussion of our management’s business affiliations and the potential conflicts of interest of which our stockholders should be aware, see “Certain Relationships and Related Persons Transactions.”
−Removed: Our significant stockholders and their affiliates are not limited in their ability to compete with us, and the corporate opportunity provisions in our Charter could enable our significant stockholders to benefit from corporate opportunities that might otherwise be available to us.
−Removed: Our governing documents provide that our significant stockholders (including portfolio investments of our significant stockholders) are not restricted from owning assets or engaging in businesses that compete directly or indirectly with us.
−Removed: In particular, subject to the limitations of applicable law, our Charter, among other things:
−Removed: ● permits our significant stockholders and any of our officers or directors who are also employees, officers or directors of the significant stockholders to conduct business that competes with us and to make investments in any kind of property in which we may make investments;
−Removed: ● provides that if our significant stockholders and any of our officers or directors who are also employees, officers or directors of the significant stockholders becomes aware of a potential business opportunity, transaction or other matter, they will have no duty to offer that opportunity to us.
−Removed: Our significant stockholders, or any of our officers or directors who are also employees, officers or directors of the significant stockholders, may become aware, from time to time, of certain business opportunities (such as acquisition opportunities) and may direct such opportunities to other businesses in which they have invested, in which case we may not become aware of or otherwise have the ability to pursue such opportunity.
−Removed: Further, such businesses may choose to compete with us for these opportunities, possibly causing these opportunities to not be available to us or causing them to be more expensive for us to pursue.
−Removed: In addition, our significant stockholders, or any of our officers or directors who are also employees, officers or directors of the significant stockholders, may dispose of coal properties or other assets in the future, without any obligation to offer us the opportunity to purchase any of those assets.
−Removed: As a result, our renunciation of our interest and expectancy in any business opportunity that may be from time to time presented to our significant stockholders, or any of our officers or directors who are also employees, officers or directors of the significant stockholders, could adversely impact our business or prospects if attractive business opportunities are procured by such parties for their own benefit rather than for ours.
−Removed: Each of our significant stockholders has resources greater than we do, which may make it more difficult for us to compete with our significant stockholders with respect to commercial activities as well as for potential acquisitions.
−Removed: We cannot assure you that any conflicts that may arise between us and our minority stockholders, on the one hand, and our significant stockholders, on the other hand, will be resolved in our favor.
−Removed: As a result, competition from our significant stockholders could adversely impact our results of operations.
Our Charter and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock.
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Our Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
−Removed: Our Charter provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our Charter or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
+Added: Our Charter provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a
+Added: claim arising pursuant to any provision of the DGCL, our Charter or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
This exclusive forum provision does not apply to a cause of action brought under federal or state securities laws.
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Alternatively, if a court were to find these provisions of our Charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
+Added: We have identified a material weakness in our internal controls over financial reporting.
+Added: If we fail to maintain an effective system of internal controls, such failure could cause investors to lose confidence in our reported financial information, which could harm our business and have a material adverse effect on the price of our common stock.
+Added: In 2022, management identified a material weakness in our internal controls over financial reporting related to information technology general controls in the areas of user access and segregation of duties related to certain information technology systems that support the Company’s financial reporting process.
+Added: The Company has begun the process of designing and implementing effective internal control measures to improve its internal controls over financial reporting and remediate this material weakness.
+Added: The Company’s efforts include modifying information technology general controls over user access and implementing additional controls designed to detect issues that may arise over user access and segregation of duties conflicts.
+Added: We will consider the material weakness remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.
+Added: However, our remedial actions may not prevent this or similar weaknesses from occurring in the future.
+Added: We are required to comply with a variety of reporting, accounting and other rules and regulations.
+Added: As a result, we maintain a system of internal control over financial reporting, but there are limitations inherent in internal control systems and significant deficiencies or material weaknesses are possible.
+Added: A control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
+Added: In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be appropriate relative to their costs.
+Added: Furthermore, compliance with existing requirements is expensive and we may need to implement additional finance and accounting and other systems, procedures and controls to satisfy our reporting requirements.
+Added: If our internal control over financial reporting is determined to be ineffective, or if we are unable to appropriately or timely remediate any such effectiveness, such failure could cause investors to lose confidence in our reported financial information, negatively affect the market price of our common stock, subject us to regulatory investigations and penalties, require us to expend significant resources to remediate the deficiencies, impair our access to capital and otherwise materially adversely impact us.
General Risk Factors
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corporate income tax rate to 28%.
−Removed: Such changes are potentially more likely under the new Democratic party-controlled Congress.
+Added: Such changes are potentially more likely under the Democratic party-controlled Congress.
We are unable to predict whether any such changes will ultimately be enacted, but any such changes could have a material impact on our cash tax liabilities, results of operations or financial condition.
−Removed: Changes in the method of determining the London Interbank Offered Rate, or the replacement of the London Interbank Offered Rate with an alternative reference rate, may adversely affect interest expense related to outstanding debt.
−Removed: Amounts drawn under our current debt agreements may bear interest at rates based on the London Interbank Offered Rate (“LIBOR”).
−Removed: On July 27, 2017, the United Kingdom's Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021.
−Removed: On November 30, 2020, ICE Benchmark Administration ("IBA"), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom's Financial Conduct Authority, announced plans to consult on ceasing publication of USD LIBOR on December 31, 2021 for only the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other USD Libor tenors.
−Removed: While this announcement extends the transition period to June 2023, the United States Federal Reserve concurrently issued a statement advising banks to stop new USD LIBOR issuances by the end of 2021.
−Removed: In light of these recent announcements, the future of LIBOR at this time is uncertain and any changes in the methods by which LIBOR is determined or regulatory activity related to LIBOR's phaseout could cause LIBOR to perform differently than in the past or cease to exist.
−Removed: Uncertainty as to the nature of such potential phase-out and alternative reference rates or disruption in the financial market could adversely affect our financial condition, results of operations and cash flows.
−Removed: If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.
−Removed: As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our common stock.
−Removed: Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company.
−Removed: If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed.
−Removed: We cannot be certain that our efforts to maintain our internal controls will be successful or that we will be able to comply with our obligations under Section 404 of the Sarbanes Oxley Act of 2002.
−Removed: Any failure to maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm our operating results or cause us to fail to meet our reporting obligations.
−Removed: Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock.
Debt we incur in the future may limit our flexibility to obtain financing and to pursue other business opportunities.
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We may not be able to affect any of these actions on satisfactory terms or at all.
−Removed: The requirements of being a public company, including compliance with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs and consume management attention, and we may be unable to comply with these requirements in a timely or cost-effective manner.
−Removed: As a public company, we need to comply with new laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act of 2002, related regulations of the SEC and the requirements of the NASDAQ, with which we were not required to comply as a private company.
+Added: The terms of the indenture governing our Senior Notes and the agreements and instruments governing our other indebtedness and surety bonding obligations impose restrictions that may limit our operating and financial flexibility.
+Added: The indenture governing our Senior Notes and the agreements governing our other indebtedness and surety bonding obligations contain certain restrictions and covenants which restrict our ability to incur liens and/or debt or provide guarantees in respect of obligations of any other person and other restrictions, all of which could adversely affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations.
+Added: These covenants limit, among other things, our ability to:
+Added: ● incur additional indebtedness;
+Added: ● pay dividends on or make distributions in respect of stock or make certain other restricted payments, such as share repurchases;
+Added: ● make capital investments;
+Added: ● enter into agreements that restrict distributions from certain subsidiaries;
+Added: ● sell or otherwise dispose of assets;
+Added: ● use for general purposes the cash received from certain allowable asset sales or disposals;
+Added: ● enter into transactions with affiliates;
+Added: ● create or incur liens;
+Added: ● merge, consolidate or sell all or substantially all of our assets;
+Added: ● receive dividends or other payments from subsidiaries in certain cases.
+Added: Our ability to comply with these covenants may be affected by events beyond our control and we may need to refinance existing debt in the future.
+Added: A breach of any of the covenants under the indenture together with the expiration of any cure period, if applicable, could result in a default under our indenture.
+Added: If any such default occurs, subject to applicable grace periods, the holders of our Senior Note may elect to declare all outstanding Senior Notes, together with accrued interest and other amounts payable thereunder, to be immediately due and payable.
+Added: If the obligations under our Senior Notes were to be accelerated, our financial resources may be insufficient to repay the Senior Notes and any other indebtedness becoming due in full.
+Added: In addition, if we breach the covenants in the indenture governing the Senior Notes and do not cure such breach within the applicable time periods specified therein, we would cause an event of default under the indenture governing the Senior Notes and a cross-default to certain of our other indebtedness and the lenders or holders thereunder could accelerate their obligations.
+Added: If our indebtedness is accelerated, we may not be able to repay our indebtedness or borrow
+Added: sufficient funds to refinance it.
+Added: Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us.
+Added: If our indebtedness is in default for any reason, our business, financial condition and results of operations could be materially and adversely affected.
+Added: In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy and compete against companies who are not subject to such restrictions.
+Added: The number and quantity of viable financing and insurance alternatives available to us may be significantly impacted by unfavorable lending and investment policies by financial institutions and insurance companies associated with concerns about environmental impacts of coal combustion, and negative views around our efforts with respect to environmental and social matters and related governance considerations could harm the perception of our company by a significant number of investors or result in the exclusion of our securities from consideration by those investors.
+Added: Certain banks, other financing sources and insurance companies have taken actions to limit available financing and insurance coverage for the development of new coal-fueled power plants and coal producers and utilities that derive a majority of their revenue from coal, and particularly from thermal coal.
+Added: This may adversely impact the future global demand for coal.
+Added: Increasingly, the actions of such financial institutions and insurance companies are informed by non-standardized “sustainability” scores, ratings and benchmarking studies provided by various organizations that assess environmental, social and governance matters.
+Added: Further, there have been efforts in recent years by members of the general financial and investment communities, including investment advisors, sovereign wealth funds, public pension funds, universities and other institutional investors, to divest themselves and to promote the divestment of securities issued by companies involved in the fossil fuel extraction market, or that have low ratings or scores in studies and assessments of the type noted above, including coal producers.
+Added: These entities also have been pressuring lenders to limit financing available to such companies.
+Added: These efforts may have adverse consequences, including, but not limited to:
+Added: ● restricting our ability to access capital and financial markets in the future;
+Added: ● reducing the demand and price for our equity securities;
+Added: ● increasing the cost of borrowing;
+Added: ● causing a decline in our credit ratings;
+Added: ● reducing the availability, and/or increasing the cost of, third-party insurance;
+Added: ● increasing our retention of risk through self-insurance;
+Added: ● making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing;
+Added: ● limiting our flexibility in business development activities such as mergers, acquisitions and divestitures.
+Added: If securities or industry analysts adversely change their recommendations regarding our stock or if our operating results do not meet their expectations, our stock price could decline.
+Added: The trading market for our common stock could be influenced by the research and reports that industry or securities analysts may publish about us or our business.
+Added: If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
+Added: Moreover, if one or more of the analysts who cover our company downgrade our stock or if our operating results do not meet their expectations, our stock price could decline.
+Added: The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs and consume management attention, and we may be unable to comply with these requirements in a timely or cost-effective manner.
+Added: As a public company, we must comply with new laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act, related regulations of the SEC and the requirements of the NASDAQ, with which we were not required to comply as a private company.
Complying with these statutes, regulations and requirements occupies a significant amount of time for our board of directors and management and significantly increases our costs and expenses.
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● involve and retain to a greater degree outside counsel and accountants in the above activities.
−Removed: Furthermore, while we generally must comply with Section 404 of the Sarbanes-Oxley Act of 2002, we are not required to have our independent registered public accounting firm attest to the effectiveness of our internal controls until our first annual report subsequent to our ceasing to be an “emerging growth company” within the meaning of Section 2(a)(19) of the Securities Act.
−Removed: Accordingly, we may not be required to have our independent registered public accounting firm attest to the effectiveness of our internal controls until as late as our annual report for the fiscal year ending December 31, 2022.
Once it is required to do so, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, operated or reviewed.
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As noted above, we are also subject to the possibility of cyber incidents or attacks, which themselves may result in a violation of these laws or may result in significant expense.
+Added: We may be subject to litigation, the disposition of which could negatively affect our profitability and cash flow in a particular period, or have a material adverse effect on our business, financial condition and results of operations
+Added: Our profitability or cash flow in a particular period could be affected by an adverse ruling in any litigation that may be filed against us in the future.
+Added: In addition, such litigation could have a material adverse effect on our business, financial condition and results of operations.
+Added: See “Part I, Item 3.
+Added: Legal Proceedings.”
Unresolved Staff Comments
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.