What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-14 compared with 2023-03-14 · 446 added, 330 removed, 522 unchanged (60% of the section changed)

8 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

Ramaco Resources, Inc.

Opinion on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Ramaco Resources, Inc.

and subsidiaries (the "Company") as of December 31, 2022, and the related consolidated statements of operations, equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in 2013 Internal Control-Integrated Framework issued by COSO.

To the Board of Directors and

Stockholders of Ramaco Resources, Inc.

Lexington, Kentucky

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Ramaco Resources, Inc.

(the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, equity, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 14, 2024, expressed an adverse opinion.

Basis for Opinion

The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting.

Our responsibility is to express an opinion on the Company's financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws, and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that responds to those risks.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

An entity's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

An entity's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the entity are being

made only in accordance with authorizations of management and directors of the entity;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Asset Retirement Obligations

At December 31, 2022, the Company's asset retirement obligation ("ARO") liabilities totaled $28.9 million.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter – Asset Retirement Obligation Description

At December 31, 2023, the Company's asset retirement obligation ("ARO") liabilities totaled $29.0 million.

As discussed in Note 2 and Note 5 to the financial statements, the Company estimates its ARO liabilities for final reclamation based upon detailed engineering calculations of the amount and timing of the future cash spending for a third party to perform the required work.

The Company records an ARO asset associated with the discounted liability for final reclamation.

The obligation and corresponding asset are recognized in the period in which the liability is incurred.

The obligation and corresponding asset are recognized in the period

in which the liability is incurred.

As changes in estimates occur, the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free rate.

We identified the valuation of the asset retirement obligation as a critical audit matter because the estimate involves a high degree of subjectivity and auditing the significant assumptions utilized by management in estimating the amount of the liability requires judgment.

In particular, the obligation is determined using a discounted cash flow technique and is based upon mining permit requirements and various assumptions including discount rates, inflation rate, estimates of disturbed acreage, timing of reclamation activities, and third-party reclamation costs.

To audit the ARO liabilities, our procedures included, among others:

● We obtained an understanding of the relevant controls related to the Company's accounting for the ARO liability, including the controls over management's review of the significant assumptions and other inputs.

In particular, the obligation is determined using a discounted cash flow technique and is based upon mining permit requirements and various assumptions including discount rates, inflation rate, estimates of disturbed acreage and reclamation activities, timing of reclamation activities, and third-party reclamation costs.

How the Critical Audit Matter was Addressed in the Audit

Our principal audit procedures performed to address this critical audit matter included the following:

● We evaluated the methodology used, and tested the significant assumptions discussed above and the underlying data used by the Company in its estimate.

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● We utilized an external specialist to assist in our assessment of the Company's ARO liability.

As part of this effort, the specialist performed a selected observation of mine site operations, interviewed members of the Company's engineering staff, assessed the completeness of the mine reclamation estimate with respect to meeting mine closure and post closure plan regulatory requirements, and evaluated the reasonableness of the engineering estimates and assumptions.

/s/ MCM CPAs & Advisors LLP

We have served as the Company's auditor since 2022.

As part of this effort, the specialist performed a selected observation of mine site operations, interviewed management’s engineering specialist, assessed the completeness of the mine reclamation estimate with respect to meeting mine closure and post closure plan regulatory requirements by comparing costs to permits on selected sites, and evaluated the reasonableness of the engineering estimates and assumptions.

Critical Audit Matter – Class B Common Stock Distribution Description

During the year ended December 31, 2023, the Company created a separate Class B common stock as discussed in Note 9 of the financial statements.

An initial distribution of this Class B common stock occurred on June 21, 2023, via a stock dividend to existing holders of common stock as of May 12, 2023.

At the date of distribution, each holder of common stock received 0.2 shares of Class B common stock for every one share of existing common stock held on the record date.

Similar actions or modifications occurred for holders of outstanding stock-based awards.

The holders of the Class B shares have different dividend expectations that are subject to the sole discretion of the Company’s Board of Directors.

Also, the Class B shares do not represent a direct interest in a separate legal entity or direct interest in specific assets.

The accounting for this distribution and its effect on other areas of financial reporting involved complex accounting considerations including interpretive guidance.

The magnitude of the transaction and uniqueness of the characteristics of the Class B shares required significant research and judgment regarding accounting and disclosure conclusions.

How the Critical Audit Matter was Addressed in the Audit

Our principal audit procedures performed to address this critical audit matter included the following:

We read the related agreements and analyzed the terms of the Class B equity transaction.

● We evaluated management’s interpretation and application of the relevant accounting guidance in relation to the facts and circumstances involved and the conclusions reached regarding the accounting treatment for this transaction.

● We evaluated the disclosures surrounding the Class B shares and rights, earnings per share, and fair value, to ensure these were disclosed in accordance with the relevant accounting guidance.

/s/ Cherry Bekaert LLP

We have served as the Company’s auditor since 2022 (such date takes into account the acquisition of MCM CPAs & Advisors LLP by Cherry Bekaert LLP effective October 31, 2023)

Louisville, Kentucky

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and the Board of Directors of Ramaco Resources, Inc.

To the Board of Directors and

Stockholders of Ramaco Resources, Inc.

Lexington, Kentucky

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Ramaco Resources, Inc.

(the "Company") as of December 31, 2021, the related consolidated statements of operations, equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Opinion on Internal Control over Financial Reporting

We have audited Ramaco Resources, Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, because of the effect of the material weakness described in the following paragraph on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control–Integrated Framework (2013) issued by COSO.

A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management identified a material weakness related to a pervasive lack of sufficient documentation of accounting policies, procedures, and controls.

This lack of sufficient documentation does not allow management to effectively assess its relevant risks and key controls to properly test for design and operating effectiveness.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 financial statements, and this report does not affect our report dated March 14, 2024, on those financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets and the related consolidated statements of operations, equity, and cash flows of the Company, and our report dated March 14, 2024, expressed an unqualified opinion.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting included in Item 9A–Controls and Procedures in the Company’s 2023 Annual Report on Form 10-K.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Crowe LLP

We served as the Company’s auditor from January 2022 through April 2022.

Houston, Texas

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial

reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

/s/ Cherry Bekaert LLP

Louisville, Kentucky

March 14, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Ramaco Resources, Inc.

Stockholders and the Board of Directors of Ramaco Resources, Inc.

Lexington, Kentucky

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(the “Company”) for the year ended December 31, 2021, and the related notes (collectively referred to as the "financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated results of its operations and its cash flows for the year ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

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We believe that our audit provides a reasonable basis for our opinion.

/s/ Briggs & Veselka Co.

We served as the Company’s auditor from 2015 to 2021.

/s/ Crowe LLP

We served as the Company’s auditor from January 2022 through April 2022.

Houston, Texas

February 18, 2021

March 31, 2022

Ramaco Resources, Inc.

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Accounts payable

Accrued expenses

Asset retirement obligations

Accrued liabilities

Current portion of asset retirement obligations

Current portion of long-term debt

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Total current liabilities

Asset retirement obligations

Asset retirement obligations, net

Long-term debt, net

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Stockholders' Equity

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized, none issued and outstanding

Common stock, $ 0.01 par value, 260,000,000 shares authorized, 44,155,735 at December 31, 2022 and 44,092,981 at December 31, 2021 shares issued and outstanding

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized, none issued or outstanding

Common stock, $ 0.01 par value, 260,000,000 shares authorized, 44,155,735 shares issued and outstanding at December 31, 2022 *

Class A common stock, $ 0.01 par value, 225,000,000 shares authorized, 44,002,581 shares issued and outstanding at December 31, 2023 *

Class B common stock, $ 0.01 par value, 35,000,000 shares authorized, 8,809,557 shares issued and outstanding at December 31, 2023

Additional paid-in capital

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Total Liabilities and Stockholders' Equity

* Common stock was reclassified to Class A common stock during Q2 2023.

Refer to Note 9.

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

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Total costs and expenses

Operating income (loss)

Operating income

Other income (expense), net

Interest expense, net

Income (loss) before tax

Income tax expense (benefit)

Net income (loss)

Earnings (loss) per common share

Basic weighted average shares outstanding

Diluted weighted average shares outstanding

Income before tax

Income tax expense

Earnings per common share *

Basic - Single class (through 6/20/2023)

Basic - Class A (6/21/2023 - 12/31/2023)

Basic - Class B (6/21/2023 - 12/31/2023)

Diluted - Single class (through 6/20/2023)

Diluted - Class A (6/21/2023 - 12/31/2023)

Diluted - Class B (6/21/2023 - 12/31/2023)

* Refer to Note 14 for earnings per common share calculations

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

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Balance at January 1, 2021

Restricted stock surrendered for withholding taxes payable

Shares surrendered for withholding taxes

Stock-based compensation

Cash dividends declared

Balance at December 31, 2021

Restricted stock surrendered for withholding taxes payable

Shares surrendered for withholding taxes

Stock options exercised

Stock-based compensation

Dividends declared

Cash dividends declared

Balance at December 31, 2022

Restricted stock surrendered for withholding taxes payable

Stock options exercised

Shares surrendered for withholding taxes

Stock options exercised (cashless)

Stock-based compensation

Dividends declared

Stock dividend declared and distributed

Cash dividends and dividend equivalents declared

Balance at December 31, 2023

* Common stock was reclassified to Class A common stock during Q2 2023.

Refer to Note 9 for additional information.

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

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Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income to net cash from operating activities:

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Loss on disposal of equipment

Other income - gain on insurance recoveries

Other income - gain on sale of mineral rights

Other income - employee retention tax credit

Other income - PPP loan

Deferred income taxes

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Accounts payable

Accrued expenses

Accrued liabilities

Net cash provided by operating activities

Cash flow from investing activities:

Cash flows from investing activities:

Capital expenditures

Acquisition of Ramaco Coal assets

Acquisition of Maben Coal assets

Acquisition of Maben assets (bond recovery in 2023)

Acquisition of Amonate assets

Proceeds from sale of mineral rights

Insurance proceeds related to property, plant, and equipment

Capitalized interest

Net cash used for investing activities

Cash flows from financing activities:

Proceeds from PPP Loan

Proceeds from borrowings

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Supplemental cash flow information:

Cash paid for interest (net of $ 1,061 capitalized in 2022)

Cash paid for taxes

Cash paid for interest (net of $ 1,137 and $ 1,061 capitalized in 2023 and 2022)

Cash paid for income taxes

Cash received for income tax refund

Non-cash investing and financing activities:

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Financed equipment purchases

Capital expenditures included in accounts payable and accrued expenses

Capital expenditures included in accounts payable and accrued liabilities

Ramaco Coal acquisition financing

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Financed insurance

Financed insurance (2022 adjustment recorded in 2023)

Accrued dividends payable

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Ramaco Resources, Inc.

(“Ramaco”) is a Delaware corporation formed in October 2016.

Our principal corporate offices are located in Lexington, Kentucky.

We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania.

As used herein, “the Company,” “we,” “us,” “our,” and similar terms include Ramaco Resources, Inc.

and its subsidiaries, unless the context indicates otherwise.

Our development portfolio primarily includes the following properties:

Elk Creek, Berwind, Knox Creek and RAM Mine.

Each of these properties possesses geologic and logistical advantages that make our coal among the lowest delivered-cost U.S.

(the “Company,” “Ramaco,” “we,” “us,” or “our”) is a Delaware corporation formed in October 2016.

Our principal corporate and executive offices are located in Lexington, Kentucky with operational offices in Charleston, West Virginia and Sheridan, Wyoming.

We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia and southwestern Virginia.

We believe each of these properties possesses geologic and logistical advantages that make our coal among the lowest delivered-cost U.S.

metallurgical coal to our domestic target customer base, North American blast furnace steel mills and coke plants, as well as international metallurgical coal consumers.

In addition, the Company completed acquisitions of Ramaco Coal, LLC (“Ramaco Coal”) and Maben Coal, LLC (“Maben Coal”) in the second and third quarter of 2022, respectively.

With the Ramaco Coal acquisition, we control mineral deposits near Sheridan, Wyoming along with facilities that house research and development activities.

With the Maben Coal acquisitions, the Company has obtained control of additional coal deposits in Wyoming County and Raleigh County, West Virginia.

Our operations include three deep mines and a surface mine at our Elk Creek mining complex (the “Elk Creek Complex”).

Development of this complex commenced in 2016 and included construction of a preparation plant and rail load-out facilities.

The Elk Creek property consists of approximately 20,200 acres of controlled mineral rights and contains approximately 16 seams that we have targeted for production.

The Company commenced expansion of the Elk Creek preparation plant during 2022 to increase production in future periods.

Development of our Berwind mining complex (the “Berwind Complex”) began in late-2017.

In 2020, we suspended development at the Berwind Complex due to lower pricing and demand largely caused by the COVID-19 outbreak.

In early-2021, as pricing and demand improved, Berwind development was restarted.

We successfully reached the thicker Pocahontas No.

4 seam in late 2021.

In December 2021, we completed the acquisition of “Amonate Assets” from subsidiaries of Coronado Global Resources Inc.

(“Coronado”), which include controlled mineral rights and a processing plant located in our Berwind Complex, saving us transportation costs to our Knox Creek plant 26 miles away.

The Berwind Complex experienced an ignition event during 2022 that resulted in idling mining operations for one of the active mines.

Production from the affected mine restarted in the first quarter of 2023.

Our Knox Creek facility includes a preparation plant and controlled mineral rights that we expect to develop in the future.

The Knox Creek preparation plant processes coal from our Berwind Complex (until the newly acquired plant at the Berwind Complex is placed into operation) as well as coal mined from the rights acquired in the Maben Coal transaction and coal purchased from third parties.

Our RAM Mine property is located in southwestern Pennsylvania and is scheduled for initial production after a mining permit is issued and market conditions warrant development.

COVID-19— Uncertainty related to COVID-19 continues to linger across the world.

The Company actively monitors for developments and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, suppliers, and stakeholders, or as required by federal, state, or local authorities.

Russia/Ukraine Conflict --Regarding the military conflict involving Russia and Ukraine, resulting sanctions and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region.

Globally, various governments have banned imports from Russia including commodities such as oil, natural gas and coal.

These events have contributed to volatility in the commodity markets.

This volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel

products, may have a significant effect on market prices and overall demand for our coal and the cost of supplies and equipment.

We are closely monitoring the potential effects on the market.

We have no meaningful direct financial exposure to Russia and Ukraine;

however, the European Union ban on Russian coal has put upward pressure on international thermal coal prices.

In addition, fear of economic contraction may affect future demand for coking coal.

We also control mineral deposits near Sheridan, Wyoming as part of the Company’s initiatives regarding the potential recovery of rare earth elements as well as the potential commercialization of coal-to-carbon-based products and materials.

Although conflicts overseas continue and global economic growth remains uncertain, supply constraints support the global metallurgical coal market.

Ongoing bans on the import of Russian coal have affected the availability of supply to certain seaborne markets as well as contributed to volatility in coal prices.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All significant intercompany balances and transactions between consolidated entities have been eliminated in consolidation.

Certain prior year amounts in the Notes to Consolidated Financial Statements have been adjusted to conform to current presentation.

Use of estimates —The preparation of these financial statements in conformity with U.S.

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Actual results could differ from those estimates.

The most significant estimates are related to the quantity and value of coal inventories, stock-based compensation, asset retirement obligations, occupational disease obligations, evaluation of long-lived assets for impairment, and the quantities and values of coal reserves, depletion and amortization, useful lives, and income taxes.

The most significant estimates are related to the quantity and value of coal inventories, stock-based compensation, asset retirement obligations, occupational disease obligations, evaluation of long-lived assets for impairment, quantities and values of coal reserves, depletion and amortization, useful lives, and income taxes.

Revenue Recognition —Our primary source of revenue is from the sale of coal through contracts with steel producers usually having durations of less than one year.

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If control of the goods transfers to the customer in the period before the final price is determined, revenue is recorded based on the estimated consideration to be received.

The Company estimates the amount to which it expects to receive by reference to forward curve or other relevant data.

These estimates have not been constrained for accounting purposes due to the short period of time over which the uncertainty is resolved.

The Company estimates the amount to which it expects to receive by reference to forward curve data, if available, and generally does not constrain such estimates for accounting purposes

due to the short period of time over which the uncertainty is resolved.

However, certain estimates of provisional pricing for which no forward curve data was available were constrained at December 31, 2023 due to index volatility.

Freight Revenue and Expense —Costs incurred to transport coal to the point of sale at the port facility are included in cost of sales and the gross amounts billed to customers to cover shipping to and handling of the coal at the port are included in revenue.

Cash and Cash Equivalents —We classify all highly-liquid instruments with an original maturity of three months or less as cash equivalents.

Restricted cash balances at December 31, 2022 and December 31, 2021 were $ 0.9 million and consisted of funds held in escrow for potential future workers’ compensation claims.

Restricted cash balances were included in other current assets on the consolidated balance sheets.

Restricted cash balances at December 31, 2023 and December 31, 2022 were $ 0.8 million and $ 0.9 million, respectively, and consisted of funds held in escrow for potential future workers’ compensation claims.

Restricted cash balances were included in other current assets on the balance sheet.

The Company pools individual bank accounts with the same institution for the purpose of assessing if a bank overdraft exists based on the contractual terms of the arrangement.

Inventories — Coal is reported as inventory at the point in time it is extracted from the mine.

Coal inventories are valued at the lower of average cost or net realizable value, with cost determined on a first-in, first-out inventory valuation method.

Coal inventory costs include labor, supplies, equipment costs, freight, operating overhead,

depreciation and amortization.

Coal inventory costs include labor, supplies, equipment costs, freight, operating overhead, depreciation and amortization.

Coal inventory quantities are adjusted periodically based on aerial surveys of coal stockpiles.

Lower of cost or net realizable value adjustments were not material.

Supply inventories are valued at average cost.

Coal inventories at December 31, 2022, were made up of $ 22.4 million of raw coal, $ 18.2 million of saleable coal, and $ 4.4 million of supplies.

Coal inventories at December 31, 2021, were made up of $ 12.5 million of saleable coal, $ 2.6 million of supplies, and $ 0.7 million of raw coal.

Inventories consisted of the following:

(In thousands)

December 31, 2023

December 31, 2022

Saleable coal

Total inventories

Property, Plant and Equipment —Property, plant and equipment is recorded at cost.

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Mining property and mineral rights costs represent the costs incurred to acquire the rights to access and mine certain coal property either through deeds, leases, or other conveyance agreements.

These costs include costs of acquiring, and accessing mineral reserves, resources and surface areas for mining activities.

These costs include the costs of acquiring, and accessing mineral reserves, resources and surface areas for mining activities.

Mine development begins when the facts and circumstances clearly establish the presence of a commercial mineralized deposit.

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Spending estimates are adjusted for inflation and then discounted at the credit-adjusted, risk-free rate.

We record the fair

value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset.

The liability is accreted to its present value each period and the capitalized cost is amortized using the units-of-production method over estimated recoverable reserves upon commencement of mining.

We record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset.

The liability is accreted to its present value over time and the capitalized cost is amortized using the units-of-production method over estimated recoverable reserves upon commencement of mining.

We review our asset retirement obligations on at least an annual basis for significant changes in the estimated timing or amount of cash flows.

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Estimating our occupational disease (pneumoconiosis) benefits obligation requires management to make estimates and judgments regarding timing and existence of a liability utilizing third-party actuaries to assist in preparing what constitutes adequate liability amounts.

Inherent in the calculation are numerous assumptions and judgments including the ultimate costs, inflation factors, credit adjusted discount rates, timing of settlement awards in the legal and regulatory environments.

Inherent in the calculation are numerous assumptions and judgments including the ultimate costs, mortality factors, credit-adjusted discount rates, and timing of settlement.

Adjustments to estimated liabilities due to changes in actuarial assumptions are recorded immediately in earnings in the period in which the change in estimate occurs.

O ther Income —We accounted for the SBA Paycheck Protection Program Loan (“PPP Loan”) as an in-substance government grant because we expected to meet the PPP Loan forgiveness eligibility criteria and concluded that the loan represents, in substance, a grant that is expected to be forgiven.

Proceeds from the PPP Loan were initially recognized as a deferred income liability.

Subsequently, we reduced this liability and recognized income on a systematic basis over the period in which the related costs for which the PPP Loan was intended were incurred.

PPP Loan income is presented as other income within the consolidated statements of operations for 2020.

In addition, we recognized $ 5.4 million associated with the Coronavirus Aid, Relief and Economic Security Act Employee Retention Tax Credit as other income within the consolidated statements of operations for 2021.

O ther Income —We recognized $ 5.4 million associated with the Coronavirus Aid, Relief and Economic Security Act Employee Retention Tax Credit as other income within the consolidated statements of operations for 2021.

Leases —We determine if an arrangement is or contains a lease at contract inception, and lease classification is determined at the commencement date.

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Operating and finance lease ROU assets and liabilities are recognized at commencement date based on the present value of the fixed lease payments over the lease term.

The Company does not separate lease and non-lease components for all leases as permitted under the accounting guidance for leases.

Company does not separate lease and non-lease components for all leases as permitted under the accounting guidance for leases.

As most of our leases do not contain a readily determinable implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date.

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Level 1 - inputs are quoted prices in active markets for the identical assets or liabilities;

Level 2 - inputs are other than quoted prices included in Level 1 that are directly or

indirectly observable through market-corroborated inputs;

Level 2 - inputs are other than quoted prices included in Level 1 that are directly or indirectly observable through market-corroborated inputs;

and Level 3 - inputs are unobservable, or observable but cannot be market-corroborated, requiring us to make assumptions about pricing by market participants.

The fair values of cash and cash equivalents, accounts receivable, restricted cash, and accounts payable approximate their carrying amounts at each reporting date.

The Company’s Senior Notes have an estimated fair value of $ 36 million and $ 38 million at December 31, 2022 and 2021, respectively.

The fair values of the Company’s Senior Notes were based on observable market prices and were considered a Level 2 measurement at December 31, 2022 and a Level 1 measurement at December 31, 2021 based on trading volumes.

The Company’s Senior Notes had an estimated fair value of $ 35.5 million and $ 36.3 million at December 31, 2023 and 2022, respectively.

The fair values of the Company’s Senior Notes were based on observable market prices and were considered a Level 2 measurement at December 31, 2023 and December 31, 2022 based on trading volumes.

The difference between the fair value and carrying amount of the Company’s remaining debts is not material due to the similarity between the terms of the debt agreements and prevailing market terms available to the Company.

Refer to Note 7 for additional information regarding debt.

Nonrecurring fair value measurements of the Company include asset retirement obligations and estimated values used to allocate the acquisition cost of long-lived assets to individual assets, neither of which are subject to the fair value disclosure requirements.

The fair value of asset retirement obligations is determined as the present value of estimated cash flows related to reclamation obligations, which is likely a Level 3 measurement due the use of unobservable inputs such as estimates regarding the amount and timing of costs to be incurred, the Company’s credit-adjusted discount rate, and inflation rates.

The consideration for the Company’s acquisitions was allocated based on the relative fair values of the assets acquired, the primary asset of which was mineral rights.

The fair value of asset retirement obligations is determined as the present value of estimated cash flows related to reclamation obligations, which would likely be a Level 3 measurement due to the use of unobservable inputs such as estimates regarding the amount and timing of costs to be incurred, inflation rates, and the Company’s credit-adjusted discount rate.

The consideration for the Company’s prior year acquisitions was allocated based on the relative fair values of the assets acquired, the primary asset of which was mineral rights.

The fair values of mineral rights were determined based on Level 3 inputs, which are generally unobservable, requiring the Company to make assumptions about future coal prices, capital expenditures, future coal production, costs of production, and an appropriate rate at which to discount the future cash flows.

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In determining the appropriate valuation allowance, we consider the projected realization of tax benefits based on expected levels of future taxable income, available tax planning strategies and reversals of existing taxable temporary differences.

The Company had no valuation allowances on the balance sheet as of December 31, 2023 and 2022.

Uncertain tax positions are recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

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and in various state and local jurisdictions which may be routinely examined by tax authorities.

The statute of limitations is currently open for all tax returns filed.

Segment Reporting —Our properties located in West Virginia, Virginia and Pennsylvania each consist of mineral reserves for production of metallurgical coal from both underground and surface mines.

The statute of limitations for examination of the Company’s tax filings by taxing authorities is currently open for tax returns filed for the year 2020 and thereafter.

The Company recognizes accrued interest related to income tax matters in interest expense, net, separately from the tax provision recorded in income tax expense on the income statement.

Segment Reporting —Our properties located in West Virginia and Virginia each consist of mineral reserves for production of metallurgical coal from both underground and surface mines.

These operations are within the Appalachian basin.

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For financial reporting purposes, these operations represent a single segment because each possesses similar production methods, distribution methods, and customer quality and consumption characteristics, resulting in similar long-term expected financial performance.

The Ramaco Coal acquisition in 2022, as discussed in greater detail in Note 4, provides the Company with royalty savings and controlled mineral rights as well as a research and pilot facility located near Sheridan, Wyoming related to the Company’s possible expansion into the manufacturing and commercialization of advanced carbon products and materials from coal.

The Wyoming property includes a thermal coal deposit and permit and is currently undergoing mineral analysis and core drilling to assess potential concentrations of rare earth elements.

The Company refers to this potentially new business line as “CORE” (Carbon Ore-Rare Earth), signifying its focus on carbon ore and rare earth elements.

CORE represents a separate operating segment and has economic and geographic differences compared to the Company’s metallurgical operations in the Appalachian basin;

however, CORE does not meet the significance tests for separate disclosure as a reportable segment at this time.

In addition, reconciling items of the metallurgical coal segment to the Company’s consolidated results are not yet material.

The Ramaco Coal acquisition in 2022, as discussed in greater detail in Note 4, provides the Company with royalty savings and controlled mineral rights near Sheridan, Wyoming.

This property includes a thermal coal deposit and permit and is currently undergoing mineral analysis and core drilling to assess potential concentrations of rare earth elements.

The property also includes a research and pilot facility related to the Company’s possible expansion into the manufacturing and commercialization of advanced carbon products and materials from coal.

Research and development expenses related to advanced carbon products and materials are not yet material for separate disclosure.

Ramaco is also a party to certain collaborative arrangements with government researchers and other organizations, which involve providing in-kind contributions such as ores, samples, feedstock, and services.

The activities at the Sheridan property represent a separate operating segment and have economic and geographic differences compared to the Company’s metallurgical operations in the Appalachian basin.

Nonetheless, these activities do not meet the significance tests for separate disclosure as a reportable segment at this time.

The chief operating decision maker does not regularly review segment asset information for the purpose of assessing performance and making resource allocation decisions.

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The Black-Scholes model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility, risk-free interest rate, dividend rate and service period.

Concentrations —Our operations are all related to metallurgical coal within the mining industry.

A reduction in metallurgical coal prices or other disturbances in the metallurgical coal markets could have an adverse effect on our operations.

Concentrations —Our current operations are all related to metallurgical coal within the mining industry.

A reduction in metallurgical coal prices or other disturbances in the metallurgical coal markets could have an adverse effect on our financial results.

In 2023, 2022, and 2021, approximately 33 %, 58 %, and 51 %, respectively, of our revenue was derived from coal shipments to customers in North American markets.

The decrease in North American revenue in 2023 was due to sales within the United States.

During 2023, sales to three customers accounted for 15 %, 13 %, and 13 % of our revenues, or collectively 41 % of total revenue.

During 2022, sales to two customers accounted for 21 % and 17 % of our revenues, or collectively 38 % of total revenue.

During 2021, sales to three customers accounted for 30 %, 15 %, and 13 % of our revenues, or

collectively 58 % of total revenue.

The number of customers comprising the concentrations above is based on a threshold of 10 % or more of total revenues.

Financial instruments that potentially subject us to a significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable.

We maintain deposits in federally insured financial institutions in excess of federally insured limits.

We monitor the credit ratings and concentration of risk with these financial institutions on a continuing basis to safeguard cash deposits.

We monitor the credit ratings and concentration of risk with financial institutions on a continuing basis to safeguard our cash deposits.

In addition, the Company is party to an arrangement that began in 2023 whereby our cash and cash equivalents are placed at various banks in amounts no greater than the $250,000 FDIC-insured limit to help safeguard against potential losses in the financial sector.

We have a limited number of customers.

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Outstanding receivables beyond payment terms are promptly investigated and discussed with the specific customer.

We estimate an allowance for doubtful accounts by taking into consideration the age of past due accounts and an assessment of our customers’ ability to pay.

An allowance for doubtful accounts was not necessary as of December 31, 2022 and 2021.

During 2022, sales to two customers accounted for approximately 38 % of total revenue.

The total balance due from these customers at December 31, 2022 was approximately 32 % of total accounts receivable.

During 2021, sales to three customers accounted for approximately 58 % of total revenue.

The total balance due from these customers at December 31, 2021 was approximately 58 % of total accounts receivable.

During 2020, sales to three customers accounted for approximately 70 % of total revenue.

The number of customers comprising the concentrations above is based on a threshold of 10% or more of total revenues and related receivables.

Recent Accounting Pronouncements Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses , which replaces the existing incurred loss impairment model with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

We adopted this standard effective January 1, 2020.

The adoption of this ASU did not have a material impact on our consolidated financial statements because we do not have a history of credit losses on our financial instruments and have no material expected losses.

In August 2018, the FASB issued ASU 2018-15, Internal-Use Software , which addresses the accounting for implementation costs associated with a hosted service.

The standard provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the

hosting arrangement.

We adopted this standard as of January 1, 2020, on a prospective basis.

The adoption of this ASU did not have a material impact on our consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes , which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law.

The standard was effective for us in the first quarter of 2021.

The adoption of this ASU did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which became effective immediately.

The amendments in ASU 2020-04 provide optional relief regarding the accounting effects of reference rate reform, including various types of contract modifications (e.g., debt) as well as hedging relationships.

Overall, the guidance permits financial reporting that generally reflects the intended continuation of contracts that reference rates, such as the London Interbank Offered Rate (“LIBOR”), that are expected to be discontinued as a result of reference rate reform initiatives.

In December 2022, the FASB issued ASU 2022-06, which defers the sunset date of ASC 848 from December 31, 2022 to December 31, 2024.

The Company had previously entered into a term loan that referenced LIBOR;

however, this debt was repaid in the fourth quarter of 2022 and, therefore, a contract amendment to replace LIBOR is not required.

The Company is unaware of any additional references to rates that will be discontinued under reform initiatives.

We estimate an allowance for credit losses by taking into consideration the age of past due accounts and an assessment of our customers’ ability to pay.

An allowance for credit losses was not necessary as of December 31, 2023 and 2022.

Three customers accounted for 22 %, 19 %, and 15 %, of our trade receivables, or collectively 56 % of the Company’s accounts receivable balance at December 31, 2023.

The number of customers comprising the concentrations above is based on a threshold of 10 % or more of total accounts receivable.

Recent Accounting Standards Updates

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”).

The amendments in ASU 2023-06 clarify or improve disclosure and presentation requirements for a variety of topics, including debt and earnings per share.

The effective date for each amendment in ASU 2023-06 will be the effective date of the SEC’s removal of that related disclosure from existing SEC regulations, and each amendment should be applied prospectively after its effective date.

A material impact to our disclosures is not expected at this time since the Company is already subject to existing SEC disclosure requirements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

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

The amendments in ASU 2023-07 require incremental disclosures related to a public entity’s reportable segments and increase the frequency with which most segment disclosures are made.

Incremental disclosures required by the ASU include significant segment expenses regularly provided to the chief operating decision maker (“CODM”) and included within the segment’s measure of profit or loss, the title and position of the CODM and an explanation how the CODM uses the reported measure of a segment’s profit or loss to assess performance and allocate resources, and the amount and composition of other segment items necessary to reconcile segment revenue, significant expenses, and the reported measure of profit or loss.

The ASU also expands interim disclosure requirements such that nearly all annual quantitative segment disclosures will be made on an interim basis and requires that entities with a single reportable segment provide all segment disclosures that are not evident from the primary financial statements, including significant segment expenses, consistent with the approach used by management to evaluate performance.

ASU 2023-07 is effective starting with Ramaco’s 2024 annual financial statements and on a quarterly basis thereafter.

Retrospective application is required.

The Company is currently evaluating the impact of the ASU;

however, incremental disclosures will likely occur upon adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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

The amendments in ASU 2023-09 require reporting entities to disclose annual income taxes paid, net of refunds, disaggregated by federal, state, and foreign taxes and to provide additional disaggregated information for individual jurisdictions that equal or exceed 5% of total income taxes paid, net of refunds.

ASU 2023-09 also requires public business entities to disclose additional categories of information about federal, state, and foreign income taxes in their annual rate reconciliation table and provide more information about some categories if the quantitative threshold is met.

The ASU will also require disclosure of amounts and percentages in the annual rate reconciliation table, rather than amounts or percentages, and will eliminate certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities.

ASU 2023-09 is effective starting with Ramaco’s 2025 annual financial statements and may be applied prospectively to only the income tax disclosures

provided for 2025 or retrospectively by providing revised disclosures for all periods presented.

Early adoption is permitted.

The Company is currently evaluating the impact of the ASU;

however, incremental disclosures will likely be provided on a prospective basis in the Company’s 2025 annual financial statements upon adoption.

NOTE 3—PROPERTY, PLANT, AND EQUIPMENT

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Capitalized mine development costs

accumulated depreciation and amortization

accumulated depreciation, depletion, and amortization

Total property, plant, and equipment, net

Capitalized amounts related to coal reserves at properties where we are not currently engaged in mining operations totaled $ 17.4 million as of December 31, 2023 and $ 33.4 million as of December 31, 2022.

In addition to the amounts discussed above, on July 10, 2022, the Company experienced a methane ignition at the Berwind No.

On July 10, 2022, the Company experienced a methane ignition at the Berwind No.

1 mine, which was one of the active mines at our Berwind mining complex.

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1 mine restarted in the first quarter of 2023.

The Company received $ 9.2 million of insurance proceeds during 2023 related to this matter, which have been reported as part of Insurance proceeds related to property, plant, and equipment in the investing activities section of the Consolidated Statements of Cash Flows, and recognized a gain of $ 8.1 million in Other income (expense), net on the Consolidated Statement of Operations in 2023 as the Company had previously accrued a $ 1.1 million recovery asset at December 31, 2022.

Mining property and mineral rights are made up primarily of significant asset acquisitions that occurred in 2022 and 2021.

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Amortization of right-of-use assets (finance leases)

Amortization and depletion of

capitalized mine development costs and mineral rights

Amortization and depletion of capitalized

mine development costs and mineral rights

Total depreciation, depletion, and amortization

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On April 29, 2022, the acquisition of Ramaco Coal, an entity owned by an investment fund managed by Yorktown Partners and certain members of the Company's management, was completed pursuant to a Purchase and Sale Agreement, dated February 23, 2022.

The purchase price was approximately $ 65 million, consisting of an initial payment of $ 10 million paid at closing and a deferred purchase price of $ 55 million to be paid during the remainder of 2022 in $ 5 million ratable quarterly installments, and $ 10 million ratable quarterly installments to be paid in 2023 plus interest at a rate of 9 %.

The purchase price was approximately $ 65 million, consisting of an initial payment of $ 10 million paid at closing and a deferred purchase price of $ 55 million paid during the remainder of 2022 in

$ 5 million ratable quarterly installments, and $ 10 million ratable quarterly installments paid in 2023 plus interest at a rate of 9 %.

Ramaco Coal controls certain coal mineral interests of principally metallurgical coal properties which are owned in fee or leased under long-term leases that are, in turn, leased or subleased to the Company and various third parties.

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The Company also paid approximately $ 1.7 million of transaction costs and recognized liabilities of $ 1.3 million on the closing date, primarily related to $ 1.2 million of cash bond replacement obligations incurred by the Company as part of the transaction.

In October 2022, the Company paid

off the $ 1.2 million cash bond replacement obligation to Appleton Coal, LLC, which has been included in the investing activities section of the statement of cash flows.

In the fourth quarter of 2022, the Company paid off the $ 1.2 million cash bond replacement obligation to Appleton Coal, LLC, which was included in the investing activities section of the statement of cash flows.

The $ 1.2 million bond replacement payment was subsequently recovered in 2023, which reduced the cash investment related to this transaction to $ 10.7 million.

We acquired a large coal deposit on approximately 28 thousand leased acres located in Wyoming County and Raleigh County, West Virginia.

We assumed existing mining permits issued by the West Virginia Department of Environmental Protection, which authorize mining by both surface and highwall mining methods as well as by underground methods.

We assumed existing mining permits issued by the West Virginia Department of Environmental Protection, which authorizes mining by both surface and highwall mining methods as well as by underground methods.

The property also has issued permits covering an existing haul road, as well as an active refuse disposal area together with a preparation plant and unit train loadout, neither of which had been constructed as of the closing date.

The acquisition of Maben Coal was accounted for as a purchase of assets due to substantially all of the fair value being concentrated in a single asset, the rights to leased metallurgical coal deposits.

The total consideration of approximately $ 33.0 million was allocated to mining property and mineral rights ($ 30.6 million), capitalized mine development costs ($ 1.0 million), receivable for the right to recover cash bond replacement payments made by the Company as discussed above ($ 1.2 million), and recoupable royalties ($ 0.2 million).

Refer to Note 7 for information regarding the acquisition financing.

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Also purchased were several additional permitted mines and a currently idled 1.3 -million-ton per annum capacity coal preparation plant.

The Company paid an additional $ 0.6 million in 2023 for transaction-related costs, which was also included in investing activities since the delay in payment was due to administrative reasons rather than financing.

NOTE 5—ASSET RETIREMENT OBLIGATIONS

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Balance at end of year

NOTE 6—ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

Accrued expenses at December 31, 2022 consisted of accrued compensation and related benefits of $ 14.3 million, accrued purchases of $ 11.5 million, and various other liabilities.

Accrued expenses at December 31, 2021 consisted of accrued compensation and related benefits of $ 5.6 million, accrued purchases of $ 2.8 million, and various other liabilities.

NOTE 6—ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES

Accrued liabilities at December 31, 2023 consisted of accrued compensation of $ 14.6 million and various other liabilities.

Accrued expenses at December 31, 2022 consisted of accrued compensation of $ 12.1 million and various other liabilities.

The Company sponsors a defined contribution plan to assist eligible employees in providing for their future retirement needs.

The Company’s contributions to the plan totaled $ 2.3 million, $ 1.2 million, and $ 0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Contribution expenses related to the plan totaled $ 3.1 million, $ 2.3 million, and $ 1.2 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Other long-term liabilities were comprised primarily of worker’s compensation and occupational disease obligations discussed below.

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We are self-insured for certain losses relating to workers’ compensation claims and occupational disease obligations under the Federal Mine Safety and Health Act of 1969, as amended.

Starting in 2023, the Company also elected to self-insure employee medical expenses.

We purchase insurance coverage to reduce our exposure to significant levels of these claims.

Self-insured losses are accrued based upon estimates of the aggregate liability for uninsured claims incurred as of the balance sheet date using current and historical claims experience and certain actuarial assumptions.

Self-insured losses are accrued based upon estimates of the aggregate liability for uninsured claims incurred as of the balance sheet date using claims data and actuarial assumptions.

The occupational disease benefit obligation represents the present value of the actuarially computed liabilities for such benefits over the employees’ applicable years of service.

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As of December 31, 2023, the estimated aggregate liability for uninsured claims totaled $ 5.2 million, including $ 2.3 million of occupational disease obligations.

Of the aggregate liability, $ 2.7 million was included in other long-term liabilities within the consolidated balance sheets.

Of the aggregate liability, $ 3.1 million was included in Other long-term liabilities on the Consolidated Balance Sheet.

As of December 31, 2022, the estimated aggregate liability for uninsured claims totaled $ 3.6 million, including $ 1.5 million of occupational disease obligations.

Of the aggregate liability, $ 2.4 million was included in other long-term liabilities within the consolidated balance sheets.

Of the aggregate liability, $ 2.7 million was included in Other long-term liabilities within the Consolidated Balance Sheet.

Our outstanding debt consisted of the following:

(In thousands)

December 31, 2023

December 31, 2022

Revolving Credit Facility

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Long-term debt, net

Revolving Credit Facility and Term Loan — On November 2, 2018, we entered into a Credit and Security Agreement (as amended or amended and restated) with KeyBank National Association (“KeyBank”), as the administrative agent, and other lenders party thereto.

The Credit Agreement was amended on February 20, 2020 and March 19, 2021.

On October 29, 2021, we entered into the Amendment and Restatement with KeyBank.

Prior to the Amendment and Restatement, the Credit Agreement consisted of the $ 10.0 million Term Loan and up to $ 30.0 million revolving line of credit, including $ 3.0 million letter of credit availability.

The Amendment and Restatement increased the overall availability under the revolving credit line to $ 40.0 million and extended the maturity date to December 31, 2024.

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

On April 29, 2022, we entered into the First Amendment to the Amended and Restated Credit and Security Agreement with KeyBank to allow for the Ramaco Coal acquisition.

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

The Revolving Credit Facility has a maturity date of December 31, 2024 and bears interest based on the Secured Overnight Financing Rate (“SOFR”) + 2.0 % or Base Rate + 1.5 %.

“Base Rate” is the highest of (i) KeyBank’s prime rate, (ii) Federal Funds Effective Rate + 0.5 %, or (iii) SOFR + 2.0 %.

Advances under the Revolving Credit Facility are made initially as Base Rate loans but may be converted to SOFR rate loans at certain times at our discretion.

At December 31, 2021, the borrowing base was $ 38.5 million and there were $ 25.0 million of borrowings outstanding under the facility, leaving $ 13.5 million of remaining availability.

The Term Loan is secured under a Master Security Agreement with a pledge of certain underground and surface mining equipment, bears interest at LIBOR + 5.15 % and is required to be repaid in monthly installments of $ 278 thousand including accrued interest.

The term loan was repaid in full as of December 31, 2022.

The Credit Agreement contains usual and customary covenants including limitations on liens, additional indebtedness, investments, restricted payments, asset sales, mergers, affiliate transactions and other customary limitations, as well as financial covenants.

At December 31, 2022, we were in compliance with all financial covenants under the Credit Agreement.

Revolving Credit Facility— On February 15, 2023, the Company entered into the Second Amended and Restated Credit and Security Agreement, which includes KeyBank National Association (“KeyBank”), and multiple lending parties.

The facility, which has a maturity date of February 15, 2026, provides an initial aggregate revolving commitment of $ 125.0 million as well as an accordion feature of $ 50 million subject to certain terms and conditions, including lender’s consent.

The borrowing base at December 31, 2023 was $ 91.1 million based on eligible accounts receivable and inventory collateral and reserve requirements.

The remaining availability under the facility at December 31, 2023, after $ 42.5 million of outstanding borrowings, was $ 48.6 million.

Revolving loans under the facility bear interest at either the base rate plus 1.50 % or the Secured Overnight Financing Rate plus 2.00 %.

The base rate equals the highest of the administrative agent’s prime rate, the Federal Funds Effective Rate plus 0.5 %, or 3 %.

The terms of the facility include covenants limiting the ability of the Company to incur additional indebtedness, make investments or loans, incur liens, consummate mergers and similar fundamental changes, make restricted payments, and enter into transactions with affiliates.

The terms of the facility also require the Company to maintain certain covenants, including fixed charge ratio and compensating balance requirements.

A fixed charge coverage ratio of not less than 1.10 :1.00, calculated as of the last day of each fiscal quarter, must be maintained by the Company.

In addition, the Company must maintain an average daily cash balance of $ 5 million, as determined on a monthly basis, in a dedicated account as well as an additional $ 1 million in a separate dedicated account to assure future credit availability.

At December 31, 2023, we were in compliance with all debt covenants under the Revolving Credit Facility.

Key Equipment Finance Loan— On April 16, 2020, we entered into an equipment loan with Key Equipment Finance, a division of KeyBank, as lender, in the principal amount of approximately $ 4.7 million for the financing of existing underground and surface equipment (the “Equipment Loan”).

The Equipment Loan bears interest at 7.45 % per annum and is payable in 36 monthly installments of $ 147 thousand.

There is a 3 % premium for prepayment of the note within the first 12 months.

This premium declines by 1 % during each successive 12-month period.

The outstanding principal balance was $ 0.6 million at December 31, 2022.

The Equipment Loan accrued interest at 7.45 % per annum and was payable in 36 monthly installments.

The outstanding principal balance was $ 0.6 million at December 31, 2022 and was repaid in full in April 2023.

Fletcher & Co.

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The 2022 loans bear no interest and are payable in 24 monthly installments of $ 195 thousand.

The total outstanding principal balance of the Fletcher Equipment Loans was $ 6.1 million at December 31, 2022.

The total outstanding principal balance of the Fletcher Equipment Loans was $ 1.9 million at December 31, 2023 and is due in full in 2024.

Komatsu Financial Limited Partnership Loan— On August 16, 2021, we entered into an equipment loan with Komatsu Financial Limited Partnership, as lender, in the principal amount of approximately $ 1.0 million for the financing of surface equipment (the “Komatsu Equipment Loan”).

The Komatsu Equipment Loan bears interest at 4.6 % per annum and is payable in 36 monthly installments of $ 36 thousand for the first six months and then at $ 28 thousand until maturity.

Additional equipment loans of $ 0.7 million were entered into during October 2022.

The Komatsu Equipment Loan bears interest at 4.6 % per annum and is payable in 36

monthly installments of $ 36 thousand for the first six months and then at $ 28 thousand until maturity.

The outstanding principal balance of the Komatsu Equipment Loan was $ 0.6 million at December 31, 2023.

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The Brandeis Equipment Loans bear interest at 4.8 % per annum and are payable in 48 monthly installments.

Additional equipment loans of $ 0.6 million were entered into during October 2022.

The outstanding principal balance of the Brandeis Equipment Loans was $ 0.5 million at December 31, 2023.

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Ramaco Coal Deferred Purchase Price— On April 29, 2022, we acquired the assets of Ramaco Coal (see Note 4) and entered into an agreement whereby an investment fund managed by Yorktown Partners, as lender, provided financing for the acquisition in the principal amount of $ 55.0 (the “Ramaco Coal Loan”).

The Ramaco Coal Loan bears interest at 9 % per annum and is payable in seven quarterly installments of $ 5 million for each remaining quarter in 2022

and $ 10 million for each quarter in 2023 until maturity.

The outstanding principal balance of the Ramaco Coal Loan was $ 40.0 million at December 31, 2022 and is secured by the membership interests of Ramaco Coal, LLC.

In the event we make an initial public offering of the equity interests of all or substantially all of the acquired assets of Ramaco Coal, the seller shall have the option to convert up to fifty percent ( 50 %) of the then outstanding principal balance, not to exceed $ 30 million, into a proportionate equity ownership in such initial public offering.

The Ramaco Coal Loan accrued interest at 9 % per annum and was payable in seven quarterly installments of $ 5 million for each remaining quarter in 2022 and $ 10 million for each quarter in 2023 until maturity.

The outstanding principal balance of the Ramaco Coal Loan was $ 40.0 million at December 31, 2022.

The loan was repaid in full during 2023.

Financing of Maben Coal Acquisition – On September 23, 2022, we acquired 100 % of the equity interests of Maben Coal, LLC (see Note 4) and entered into a secured loan with Investec Bank PLC in the amount of $ 21.0 million to pay a portion of the purchase price.

The loan bears interest at the applicable secured overnight financing rate (“SOFR”) plus a margin of 3.0 % payable in cash, compounded monthly.

Beginning in January 2023, the Company must start making monthly repayments of the outstanding principal in the amount of $ 800 thousand per month until the maturity date of September 23, 2024.

In January 2023, the Company started making monthly repayments of the outstanding principal in the amount of $ 800 thousand per month and will continue to do so until making a balloon payment for the remaining amount on the maturity date of September 23, 2024.

The outstanding principal balance was $ 11.4 million at December 31, 2023.

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At December 31, 2023, we were in compliance with the financial covenants related to the loan.

Current portion of long-term debt – The current portion of the Company’s outstanding debt was made up of $ 20.0 million under the Revolving Credit Facility, which was paid shortly after the balance sheet date, as well as $ 6.0 million of equipment loans, $ 40.0 million of related party debt associated with the Ramaco Coal acquisition, and $ 9.6 million of financing associated with the Maben Coal acquisition.

SBA Paycheck Protection Program Loan— On April 20, 2020, we received proceeds from the PPP Loan in the amount of $ 8.4 million from KeyBank, as lender, pursuant to the PPP of the CARES Act.

The purpose of the PPP is to encourage the continued employment of workers.

We used all of the PPP Loan proceeds for eligible payroll expenses, lease, interest and utility payments.

We recognized $ 8.4 million of other income during 2020 for the anticipated full forgiveness of Paycheck Protection Program loan we received.

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

There were no amounts outstanding as of December 31, 2022 and 2021.

Insurance financing —In the fourth quarter of 2022, the Company financed premium payments of $ 5.6 million associated with various insurance policies, which must be repaid to a third-party finance company in monthly installments over a one-year term.

Current portion of long-term debt – The Company’s short-term debt at December 31, 2023 was comprised of $ 42.5 million borrowed under the Revolving Credit Facility, which was repaid shortly after the balance sheet date using funds from current operations, $ 11.4 million of unpaid financing associated with the Maben Coal Acquisition, and $ 2.6 million due under equipment loans.

The weighted average interest rate on these borrowings is approximately 7.4 %.

Insurance financing —The Company financed premium payments of $ 5.8 million associated with various insurance policies, which must be repaid to a third-party finance company in monthly installments over a one-year term.

The outstanding debt balance was $ 4.0 million at December 31, 2023, which is not reflected in the tables above or below.

The total unamortized asset balance associated with upfront payments of insurance premiums to insurance carriers was $ 5.1 million at December 31, 2022, and was included in Prepaid expenses and other on the Consolidated Balance Sheet.

Maturities of our debt, which include $ 1.7 million of discounts and issuance costs to be accreted over future periods, are as follows:

Maturities of our debt are presented below, which are $ 1.2 million higher than total debt on the balance sheet due to discounts and issuance costs to be accreted over future periods.

(In thousands)

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NOTE 8—LEASES

The Company has various finance leases for mining equipment, which are generally for terms up to 36 months and expire through 2025.

The Company has various finance leases for mining equipment, which generally include 3 - 5 year terms and expire through 2028.

In addition, we have one operating lease for office space with a term of approximately five years that runs through 2027.

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Interest expense recognized for financing lease liabilities was $ 0.6 million, $ 0.4 million, and $ 0.1 million in 2023, 2022, and 2021, respectively.

Operating lease expense was $ 0.2 million in 2022 and $ 0.1 million per year in 2021 and 2020.

Operating lease expense was $ 0.2 million in 2023, $ 0.2 million in 2022, and $ 0.1 million in 2021.

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

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Weighted average discount rate

During 2023, the Company also entered into a lease of office space in Charleston, WV, which is not reflected in the disclosures above because the commencement date has not occurred for accounting purposes.

The lease will be recognized at a later date when the space is ready to be occupied by the Company.

The term of the lease is expected to be in the range of 6 - 8 years .

Coal Leases and Associated Royalty Commitments —Leases of mineral reserves and related land leases are exempt from the lease accounting requirements addressed above.

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NOTE 9—EQUITY

We are authorized to issue up to a total of 260,000,000 shares of common stock and 50,000,000 shares of preferred stock, each having a par value of $ 0.01 per share.

Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and to receive ratably in proportion to the shares of common stock held by them any dividends declared from time to time by the board of directors.

Our common stock has no preferences or rights of conversion, exchange, pre-exemption or other subscription rights.

The Company routinely allows employees to surrender common stock to pay estimated taxes upon the vesting or exercise of stock-based compensation awards.

The value of common stock tendered by employees is determined based on the price of the Company’s common stock at the time of relinquishment.

There were no other repurchases of common shares.

On June 12, 2023, an amendment to the Company’s amended and restated certificate of incorporation was approved by shareholder vote to reclassify the Company’s existing common stock as shares of Class A common stock and create a separate Class B common stock.

We are authorized to issue up to a total of 225,000,000 shares of Class A common stock and 35,000,000 shares of Class B common stock as well as 50,000,000 shares of preferred stock, each having a par value of $ 0.01 per share.

The initial distribution of Class B common stock occurred on June 21, 2023 via a stock dividend to existing holders of common stock as of May 12, 2023.

On the date of initial distribution, each holder of common stock received 0.2 shares of Class B common stock for every one share of existing common stock held on the record date.

Similar actions or modifications occurred for holders of outstanding stock-based awards.

The distribution of the Class B common stock provides existing holders of the Company’s common stock with an opportunity to participate directly in the financial performance of the Company’s CORE assets on a stand-alone basis, separate from the Company’s metallurgical coal operations.

CORE assets were acquired initially as part of the Company’s acquisition of Ramaco Coal in the second quarter of 2022.

The financial performance of CORE assets consists of the following non-cost-bearing revenue streams based on the Company’s current expectations:

● Royalty fees derived from the royalties associated with the Ramaco Coal and Amonate reserves, which we believe approximates 3 % of Company-produced coal sales revenue excluding coal sales revenue from Knox Creek,

● Infrastructure fees based on $ 5.00 per ton of coal processed at our preparation plants and $ 2.50 per ton of loaded coal at the Company’s rail load-out facilities, and

● Future income derived, if and when realized, from advanced carbon products and rare earth elements initiatives.

The Company expects to pay a dividend equal to 20 % of the total fees above;

however, any dividend amounts declared and paid are subject to the sole discretion of the Company’s Board of Directors.

In addition, the Board of Directors retains the power to change or add expense allocation policies related to CORE, redefine CORE assets, and redetermine CORE’s per-ton usage fees at any time, in its sole discretion, without shareholder approval.

Holders of shares of Class A common stock continue to be entitled to receive dividends when and if declared by the Board of Directors subject to any statutory or contractual restrictions on the payment of dividends and to any prior rights and preferences that may be applicable to outstanding preferred stock, if any.

CORE is not a separate legal entity and holders of Class B common stock do not own a direct interest in the assets of CORE.

Holders of Class B common stock are stockholders of Ramaco Resources, Inc.

and are subject to all risks and liabilities of the Company as a whole.

With respect to voting rights, holders of Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of the stockholders and are entitled to one vote per share.

The holders of Class A common stock and Class B common stock do not have cumulative voting rights in the election of directors.

Class B common stock does not have any specific voting rights or governance rights with respect to CORE.

With respect to liquidation rights, holders of common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of liabilities and the liquidation preference of outstanding preferred stock, if any.

That is, the rights to residual net assets upon liquidation are equal between holders of Class A and Class B common stock.

Holders of Class B common stock do not have specific rights to CORE assets in the event of liquidation.

Shares of Class A common stock have no preemptive or conversion rights and are not subject to further calls or assessment by us.

There are no redemption or sinking fund provisions applicable to Class A common stock.

The Board of Directors retains the ability, in its sole discretion, to exchange all outstanding shares of Class B common stock into Class A common stock based on an exchange ratio determined by a 20 -day trailing volume-weighted average price for each class of stock.

The initial distribution of the tracking stock was recorded as a stock dividend at fair value, which was estimated to be $ 11.00 per share based on the closing price of Class B shares on the first day of regular-way trading.

The effect of the equity restructuring was a $ 102.9 million reduction in retained earnings and an increase of $ 102.9 million to Class B common stock and additional paid-in capital during the second quarter of 2023.

The Company initially distributed 8,201,956 shares of Class B common shares as well as additional restricted stock, restricted stock units, and performance stock units discussed below .

Stock-Based Compensation Awards

Outstanding stock-based awards were reclassified to Class A common stock as part of the equity restructuring discussed above.

In addition, pursuant to the terms of the Company’s outstanding stock-based awards, equitable adjustments were made in accordance with such terms, as discussed below, based on the same factor of 0.2 for every outstanding award.

Since there were no changes in fair value, vesting conditions, or award classification, no incremental compensation expense resulted.

Our Long-Term Incentive Plan (“LTIP”) is currently authorized by shareholders for the issuance of awards of up to approximately 10.9 million shares of common stock.

As of December 31, 2022, there were approximately 5.4 million shares of common stock available for grant under the LTIP, which includes 4.0 million authorized shares that became effective on February 23, 2022.

Additionally, granted but unvested shares are forfeited upon termination of employment, unless an employee enters into another written arrangement, and may not be sold, assigned, transferred, pledged or otherwise encumbered.

As of December 31, 2023, there were approximately 4.6 million shares of common stock available for grant under the LTIP.

The one-time distribution of Class B has no bearing on the authorization under the LTIP.

In general, granted but unvested shares are forfeited upon termination of employment, unless an employee enters into another written arrangement.

However, exceptions exist for certain executives that are entitled to accelerated vesting if terminated without cause.

Granted but unvested shares may not be sold, assigned, transferred, pledged or otherwise encumbered.

As of December 31, 2023, we had four types of stock-based awards outstanding:

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Stock-based compensation expense for all stock-based awards totaled $ 12.9 million in 2023, $ 8.2 million in 2022, and $ 5.3 million in 2021.

Options— We granted options for the purchase of a total of 937,424 shares of our common stock for $ 5.34 per share to two executives on August 31, 2016.

Stock Options— We granted options for the purchase of a total of 937,424 shares of our common stock for $ 5.34 per share to two executives on August 31, 2016.

The options have a ten-year term from the grant date and are fully vested.

During the third quarter of 2022, 20,000 options with an intrinsic value of $ 0.124 million were exercised, leaving a balance of 917,424 options.

The remaining options are outstanding and unexercised and were in-the-money at December 31, 2022 with an intrinsic value of $ 3.2 million.

During the third quarter of 2022, options to purchase 20,000 shares of common stock options with an intrinsic value of $ 0.124 million were exercised, leaving a balance of options to purchase 917,424 shares of common stock at December 31, 2022.

During 2023, stock options of 183,484 shares of Class B awards were distributed to these individuals under the equitable adjustments discussed above.

During the fourth quarter of 2023, options to purchase 168,712 shares of Class A common stock were exercised and stock options for 33,742 shares of Class B common stock were exercised having a combined intrinsic value of $ 2.6 million.

The remaining options outstanding and unexercised at December 31, 2023 were 748,712 for Class A common stock and 149,742 for Class B common stock, which were in-the-money at December 31, 2023, having a total intrinsic value of $ 10.9 million.

No compensation expense was recognized for these awards in 2023, 2022, or 2021 as the awards became fully vested in previous years.

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Average Grant

For Class A common stock:

Date Fair Value

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Outstanding at December 31, 2022

( 1,695,234 )

Outstanding at December 31, 2023

For Class B common stock:

Initial distribution of Class B awards - June 21, 2023

Outstanding at December 31, 2023

The total fair value of awards vested was $ 19.7 million during 2023, $ 11.0 million during 2022, and $ 5.1 million during 2021.

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Upon vesting, the restricted stock becomes unrestricted common shares.

The fair value of the restricted stock on the date of the grant during 2022, which averaged $ 14.59 per share, is amortized ratably over the service period.

The fair value of the restricted stock on the date of the grant is amortized ratably over the service period.

At December 31, 2023, there was $ 3.2 million of total unrecognized compensation cost related to unvested restricted stock to be recognized over a weighted-average period of 1.4 years.

The fair value of restricted stock awards that vested during 2022 was $ 10.3 million.

The fair value of the outstanding restricted stock awards was $ 27.7 million based on the year-end 2022 closing stock price.

In December 2019, we entered into modification agreements with 14 executives and employees holding 1.4 million shares of unvested restricted stock whereby the vesting periods for these share grants was extended an additional six months .

In exchange for the modification, we made an additional restricted stock grant to each of these executives and employees.

In all, we granted 22,000 additional restricted shares in the modification.

Incremental compensation costs associated with these modifications totaled $ 0.8 million and was recognized during 2020.

The fair value of restricted stock awards that vested during 2023 was $ 14.6 million for Class A awards and $ 3.6 million for Class B awards.

The fair value of the outstanding restricted stock awards was $ 29.3 million for Class A awards and $ 4.5 million for Class B awards based on the year-end 2023 closing stock prices.

Restricted Stock Units— We grant shares of restricted stock units to certain senior executives and key employees.

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Upon vesting and within 30 days thereafter, the recipient will receive one share of common stock for each stock unit.

The 248,706 restricted stock units granted during 2022 are linked to the Company’s common stock value which was fair valued on the date of grant at $ 15.65 per share and is recognized ratably over the service period.

At December 31, 2022, there was $ 2.7 million of total unrecognized compensation cost related to unvested restricted stock units to be recognized over the next two years .

The fair value of restricted stock unit awards that vested during 2022 was $ 0.7 million.

The fair value of the outstanding restricted stock unit awards was $ 1.5 million based on the year-end 2022 closing stock price.

The grant date fair values of restricted stock units are recognized ratably over the service period.

At December 31, 2023, there was $ 5.2 million of total unrecognized compensation cost related to unvested restricted stock units to be recognized over the weighted average period of 1.7 years.

The fair value of restricted stock unit awards that vested during 2023 was $ 1.3 million for Class A awards and $ 0.2 million for Class B awards.

The fair value of the outstanding restricted stock unit awards was $ 10.3 million for Class A awards and $ 1.6 million for Class B awards based on the year-end 2023 closing stock prices.

Performance Stock Units— We grant shares of performance stock units to certain senior executives and key employees.

These share units cliff-vest approximately three years from the date of grant based on the achievement of

targeted performance levels related to pre-established relative total shareholder return goals.

These share units cliff-vest approximately three years from the date of grant based on the achievement of targeted performance levels related to pre-established relative total shareholder return goals.

These performance stock units have the potential to be earned from 0 % to 200 % of target depending on actual results.

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Upon vesting and within 30 days thereafter, the recipient will receive one share of common stock for each stock unit.

The Company’s 248,706 performance stock units were valued relative to the stock price performance of a peer group of companies, which was fair valued at $ 22.21 per share at the date of grant based on a Monte Carlo simulation.

The Company’s performance stock units were valued relative to the stock price performance of a peer group of companies, which was based on a Monte Carlo simulation.

The fair value of the performance stock units on the date of the grant is recognized ratably over the service period.

At December 31, 2022, there was $ 3.8 million of total unrecognized compensation cost related to unvested performance stock units to be recognized over the next two years .

The intrinsic value of the outstanding performance stock units, at target, was $ 2.2 million at December 31, 2022.

On February 18, 2022, the Company announced that its Board of Directors approved an increase in its initial quarterly cash dividend to $ 5.0 million from the formerly approved $ 2.5 million that was declared and accrued in December 2021.

Dividends in the amount of $ 5.0 million, or approximately $ 0.11 per share of common stock, were paid on March 15, 2022, to shareholders of record on March 1, 2022.

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

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

Dividends in the amount of $ 5.0 million, or approximately $ 0.11 per share of common stock, were paid on December 15, 2022, to shareholders of record on December 1, 2022.

On December 8, 2022, the Company announced that its Board of Directors declared a quarterly cash dividend of approximately $ 0.1250 per share of common stock.

Dividends of $ 5.5 million were accrued in December 2022, and are payable on March 15, 2023, to shareholders of record on March 1, 2023.

For the full year 2022, the Company recognized $ 23.1 million of cash dividends declared against retained earnings, including $ 5.5 million that were unpaid as of December 31, 2022.

At December 31, 2023, there was $ 8.9 million of total unrecognized compensation cost related to unvested performance stock units to be recognized over the weighted average period of 1.7 years.

The combined intrinsic value of the outstanding performance stock units for both classes, at target, was $ 15.2 million at December 31, 2023.

The value of these awards if the performance period had ended on December 31, 2023 is estimated at approximately $ 27 million.

In addition, performance stock units granted in 2022 were modified during the first quarter of 2023.

Modifications to these awards were made up primarily of changes in the composition of the peer group as well as changes in the way relative total shareholder return is evaluated against the updated peer group.

The modification resulted in incremental fair value of $ 1.2 million, which is recognized as expense over 2023 and 2024.

Performance stock units are accounted for as awards with a market condition since vesting depends on total shareholder return relative to a group of peer companies.

Taxes Related to Stock Awards— The Company routinely allows employees to surrender common stock to pay estimated taxes upon the vesting or exercise of stock-based compensation awards.

The value of common stock tendered by employees is determined based on the price of the Company’s common stock at the time of relinquishment.

There were no other repurchases of common shares.

Dividends in the amount of $ 16.6 million, or approximately $ 0.375 per share on an aggregated basis ($ 0.125 per share for three quarterly dividends), were declared and paid to holders of common stock or Class A common stock during 2023.

On December 6, 2023, the Company announced that the Board of Directors declared a cash dividend on Class A common stock of $ 0.1375 per share to be paid on March 15, 2024 to shareholders of record on March 1, 2024.

Dividends of $ 6.0 million were accrued in December 2023 for the cash dividend to be paid in March 2024.

The Company also paid dividends to holders of Class B common stock during 2023 based on 20 % of CORE royalty and infrastructure fees.

Dividends in the amount of $ 1.5 million, or approximately $ 0.165 per share of Class B common stock, were paid on September 15, 2023 to shareholders of record on September 1, 2023.

Dividends in the amount of $ 2.2 million, or $ 0.249 per share of Class B common stock, were paid on December 15, 2023 to shareholders of record on December 1, 2023.

Refer to Note 15 for information regarding dividends declared for holders of Class B common stock subsequent to the date of the financial statements.

For the full year 2023, the Company recognized $ 27.5 million of cash dividends declared against retained earnings for all classes of common stock, including $ 6.0 million of dividends declared in December 2023 to be paid in March 2024 and $ 1.2 million of forfeitable dividends subject to the vesting conditions of outstanding restricted stock units and performance stock units.

For the full year 2023, the Company paid $ 25.8 million of cash dividends for both classes of common stock, including $ 5.5 million that were accrued at December 31, 2022.

For 2022, the Company recognized $ 23.1 million of cash dividends declared against retained earnings, or approximately $ 0.52 per share, including $ 5.5 million that were unpaid as of December 31, 2022.

For the full year 2022, the Company paid $ 20.0 million of dividends, including $ 2.5 million that were accrued at December 31, 2021.

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Many of these agreements require minimum annual royalties to be paid regardless of the amount of coal mined and sold.

Total royalty expense was $ 34.2 million, $ 18.5 million, and $ 11.8 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Total royalty expenses were $ 35.0 million, $ 34.2 million, and $ 18.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.

These agreements generally have terms running through exhaustion of all the mineable and merchantable coal covered by the respective lease.

Royalties or throughput payments are based on a percentage of the gross selling price received for the coal we mine.

royalty obligations under coal leases total $ 27.1 million and are broken down as follows:

Minimum royalty obligations under coal leases total $ 27.2 million and are broken down as follows:

$ 3.3 million for 2024, $ 3.3 million for 2025, $ 3.2 million for 2026, $ 3.2 million for 2027, $ 3.2 million for 2028, and $ 11.0 million thereafter.

Please refer to Note 12 for information regarding related party transactions.

Refer to Note 12 for information regarding related party transactions.

Contingent Transportation Purchase Commitments —We secure the ability to transport coal through rail contracts and export terminals that are sometimes funded through take-or-pay arrangements.

As of December 31, 2022, the Company’s remaining commitments under take-or-pay arrangements expiring through March 31, 2024 totaled $ 5.1 million, the majority of which are expected to be satisfied in one year.

As of December 31, 2023, the Company’s remaining commitments under take-or-pay arrangements totaled $ 20.2 million, most of which relates to a five-year contract that was entered into during 2023 with a total remaining commitment of $ 20.0 million.

The five-year contract, which runs from April 1, 2023 through March 31, 2028, includes an annual minimum commitment of $4.5 million.

The level of these commitments will be reduced at a per ton rate as such rail and export terminal services are utilized against the required minimum tonnage amounts over the contract term stipulated in such rail and export terminal contracts.

No amounts have been recognized as contingent liabilities related to take-or-pay arrangements.

We recognized $ 0.8 million of contingent liabilities at December 31, 2023 related to the probable shortfall associated with our annual minimum commitment.

Litigation —From time to time, we are subject to various litigation and other claims in the normal course of business.

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The trial in the matter commenced on June 29, 2021, in Charleston, West Virginia.

On July 15, 2021, the jury returned a verdict in our favor for $ 7.7 million in compensatory damages and on July 16, 2021, made an additional award of $ 25.0 million for inconvenience and aggravation.

On July 15, 2021, the jury returned a verdict in our favor for $ 7.7 million in contract damages and on July 16, 2021, made an additional award of $ 25.0 million for damages for wrongful denial of the claim under Hayseeds, Inc.

State Farm Fire & Cas.

323, 352 S.E.

1986), including inconvenience and aggravation.

On August 12, 2021, the defendants filed a post-trial motion for judgment as a matter of law or in the alternative to alter or amend the judgment or for a new trial.

The parties fully briefed the motion, and it stood submitted on August 31, 2021.

On March 4, 2022, the court entered its memorandum opinion and order on the motion reducing the jury award to a total of $ 1.8 million, including pre-judgment interest, based largely on the court’s decision to vacate and set aside, in its entirety, the jury award of damages for inconvenience and aggravation.

On March 4, 2022, the court entered its memorandum opinion and order on the motion reducing the jury award to a total of $ 1.8 million, including pre-judgment interest, and also vacated and set aside, in its entirety, the jury award of Hayseeds damages.

The same day, the court entered the judgment in accordance with the memorandum opinion and order.

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Court of Appeals for the Fourth Circuit.

The matter has been fully briefed by the parties, and the court heard oral argument on January 27, 2023.

The matter is now pending before the court.

On July 20, 2023, the court rendered a decision reinstating the jury’s $ 7.7 million contract damages verdict.

The court further determined that we are entitled to attorney’s fees in an amount to be determined on remand.

Finally, the court held that we are entitled to Hayseeds damages for wrongful denial of the claim but remanded for a new trial on the amount of such damages after affirming that the original $ 25 million award was excessive.

On August 3, 2023, the Defendants-Appellees filed a Petition of Rehearing and Rehearing En Banc with the Fourth Circuit.

The petition was denied by order dated August 15, 2023.

On August 29, 2023, the court clarified that the amount of attorney’s fees to be determined on remand included appellate fees.

On September 8, 2023, the court entered its amended judgment, which awarded post-judgment interest on the previously awarded and reinstated verdict related to contract (compensatory) damages and the Fourth Circuit thereafter issued its mandate on October 2, 2023.

The matter is now pending before the District Court for a new trial on damages for inconvenience and aggravation as well as the court’s determination and award of attorney’s fees.

The defendants fully paid the portion of the judgment related to contract (compensatory) damages in the court’s order and that portion of the matter is considered closed.

The Company recognized a $ 7.8 million gain during 2023, which was recorded in Other income (expense), net on the Consolidated Statements of Operations.

Of this amount, $ 2.0 million was included in Insurance proceeds related to property, plant, and equipment as part of investing activities on the Consolidated Statements of Cash Flows and the remaining amount was included in operating activities.

NOTE 11—REVENUES

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Export sales have spot or term contracts, and pricing can be either a fixed price or a price derived against index-based pricing mechanisms.

Sales completed with delivery to an export terminal are reported as export revenue.

Sales completed with

delivery to an export terminal are reported as export revenue.

Disaggregated information about our revenue is presented below:

Year ended December 31,

(In thousands)

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Total revenue

Fourth quarter 2023 revenue that can be derived from the Company’s periodic filings includes a $ 1.3 million upward adjustment to revenue related to performance obligations that were satisfied in the previous quarter.

Fourth quarter 2022 revenue that can be derived from the Company’s periodic filings includes a $ 2.8 million downward adjustment to revenue related to performance obligations that were satisfied in the previous quarter.

This adjustment was due to the true-up of the Company’s previous estimate of certain provisional pricing provisions.

As of December 31, 2022, the Company had outstanding performance obligations of approximately 1.5 million tons for contracts with fixed sales prices averaging $ 202 per ton, excluding freight, which will generally be satisfied within the next year, and 0.7 million tons for contracts with index-based pricing mechanisms .

Index-based prices have not been estimated for the purpose of disclosing remaining performance obligations as permitted under the revenue recognition guidance when variable consideration is allocated entirely to a wholly unsatisfied performance obligation.

Sales into individual foreign countries equaling or exceeding 10 % of our total revenues included Canada and South Africa at 12 % and 10 %, respectively, for 2022.

These adjustments were due to true-ups of previous estimates for provisional pricing provisions.

As of December 31, 2023, the Company had outstanding performance obligations of approximately 1.4 million tons for contracts with fixed sales prices averaging $ 166 per ton and 2.1 million additional tons for contracts with index-based pricing mechanisms .

The Company expects to satisfy approximately 88 % of the committed tons in 2024 and the remainder in 2025.

Variable amounts, including index-based prices, have not been estimated for the purpose of disclosing remaining performance obligations as permitted under the revenue recognition guidance when variable consideration is allocated entirely to a wholly unsatisfied performance obligation.

Sales into individual foreign countries equaling or exceeding 10 % of our total revenues included Germany and Canada, each of which represented 14 % of 2023 revenues, as well as Brazil, which represented 10 % of 2023 revenues.

Sales into Canada and South Africa were 12 % and 10 %, respectively, of 2022 revenues.

The Company used the final export destination of the goods as the basis for these disclosures.

NOTE 12—RELATED PARTY TRANSACTIONS

Mineral Lease and Surface Rights Agreements —Prior to the acquisition of Ramaco Coal, as discussed in Note 4, much of the coal reserves and surface rights that we controlled were acquired through a series of mineral leases and surface rights agreements with Ramaco Coal, who was a related party.

Production royalties payable to Ramaco Coal in the amount of $ 0.4 million were included in accounts payable on the December 31, 2021 consolidated balance sheet.

Royalties paid to Ramaco Coal in 2022 prior to the acquisition totaled $ 3.1 million.

Royalties paid to Ramaco Coal in 2021 and 2020 totaled $ 5.7 million and $ 4.5 million, respectively.

Administrative Services —Also prior to the acquisition of Ramaco Coal, the Company and Ramaco Coal agreed to share the services of certain of each company’s employees pursuant to a Mutual Service Agreement, dated December 22, 2017, and effective as of March 31, 2017.

Each party will pay the other a fee on a quarterly basis for such services calculated as the annual base salary of each employee providing services multiplied by the percentage of time each employee spent providing services for the other party.

Year-to-date charges to Ramaco Coal in 2022, prior to the acquisition, were $ 44 thousand.

Charges to Ramaco Coal were $ 0.1 million in 2021 and $ 0.2 million in 2020.

Royalties paid to Ramaco Coal in 2021 totaled $ 5.7 million.

Legal Services —Some of the professional legal services we receive are provided by Jones & Associates (“Jones”), a related party.

Legal services paid to Jones in 2022 and 2021 totaled $ 0.8 million and zero , respectively.

Ramaco Coal Deferred Purchase Price— As part of the financing of the acquisition of Ramaco Coal, as discussed in Note 4, we incurred interest expense of $ 3.0 million in 2022.

The outstanding principal balance of the Ramaco Coal Loan was $ 40.0 million at December 31, 2022.

Legal services incurred for Jones in 2023 and 2022 totaled zero and $ 0.8 million, respectively.

Legal services payable to Jones were zero (paid in full in 2023) and $ 0.6 million at December 31, 2023 and December 31, 2022, respectively, and were included in Accrued liabilities on the Consolidated Balance Sheet.

Ramaco Coal Deferred Purchase Price— As part of the financing of the acquisition of Ramaco Coal, as discussed in Note 4, we incurred interest expense of $ 1.8 million in 2023 and $ 3.0 million in 2022.

The outstanding principal balance of the Ramaco Coal Loan was zero and $ 40.0 million at December 31, 2023 and December 31, 2022, respectively.

Refer to Note 7 for additional information regarding the terms of the financing.

Ramaco Foundation-- The Company made a charitable cash contribution of $ 1.0 million during 2022 to the Ramaco Foundation, which was recognized in other income (expense), net, on the income statement.

In addition, the Company owed an additional $ 0.4 million to Yorktown Partners at December 31, 2023, in connection with the Ramaco Coal acquisition, which is included in Accounts payable on the Consolidated Balance Sheet.

Ramaco Foundation-- The Company made a charitable cash contribution of $ 1.0 million during 2022 to the Ramaco Foundation, which was recognized in Other income (expense), net , on the Consolidated Statement of Operations.

The Ramaco Foundation is an unconsolidated not-for-profit organization whose board of directors includes several members of the Company’s management and board of directors.

Other Professional Services— The Company has also entered into professional services with three other related parties, which have been aggregated due to immateriality.

Professional services incurred for these related parties were $ 0.3 million in 2023 and $ 0.1 million in 2022, respectively.

NOTE 13—INCOME TAXES

Income tax expense (benefit) consisted of the following:

Ramaco Resources, Inc.

is organized as a corporation under the laws of Delaware.

Ramaco Resources, Inc.

files a consolidated U.S.

federal tax return with its wholly owned subsidiaries.

All our operations are wholly within the United States, but our products are sold to customers worldwide.

Income tax expense consisted of the following:

Years ended December 31,

4 unchanged sentences

Deferred taxes

Provision for income tax expense (benefit), net

Provision for income tax expense, net

The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes were as follows:

5 unchanged sentences

Percentage depletion

PPP Loan forgiveness

Stock-based compensation

162(m) compensation limitation

Foreign-derived intangible income deduction

During the current year, there was a significant increase in the foreign-derived intangible income deduction related to our worldwide sales.

The amount of excess tax benefits for stock-based compensation and subsequently the impact of IRC Section 162(m) for covered employees increased in the current year due to stock exercises.

Deferred tax assets and liabilities were as follows:

8 unchanged sentences

Deferred tax liabilities:

Depreciation & amortization

Property, plant, and equipment

Net deferred tax liabilities

As of December 31, 2022, our federal net operating loss carryforwards were approximately $ 24 million.

During the current period, the federal net operating loss carryforwards were fully utilized.

As of December 31, 2023, there were no federal net operating loss carryforwards remaining.

Total state loss carryforwards were approximately $ 35 million.

The Company’s net operating loss carryforwards have no statutory expiration.

The Company’s net operating loss carryforwards are not subject to statutory expiration.

No valuation allowance was recognized by the Company for deferred tax assets as of December 31, 2023 or December 31, 2022.

We are subject to federal, state, and local income taxes in the United States.

Significant judgment is required in evaluating tax positions taken and determining the provision for income taxes.

As of December 31, 2023, we do not have any unrecognized tax benefits.

The tax years 2020 through 2022 remain subject to examination by the taxing authorities.

We are not currently under examination by any taxing authorities.

Cash paid for income taxes totaled $ 15.5 million in 2022.

The Company recognized an income tax receivable of $ 14.6 million included in prepaid expenses and other current assets at December 31, 2022.

Cash paid for income taxes totaled $ 0.8 million for 2023 before consideration of refunds received.

The Company received a refund of $ 11.8 million during 2023, which drove the decrease in prepaid expenses and other current assets on the balance sheet compared to December 31, 2022.

NOTE 14—EARNINGS (LOSS) PER SHARE

The following table is a calculation of the net earnings (loss) per basic and diluted share:

Years ended December 31,

Earnings per share (“EPS”) is not presented retrospectively for periods prior to the issuance of the tracking stock as the tracking stock was not a part of the Company’s capital structure during those periods and the issuance of the tracking stock changes the common shareholders’ relative residual interest in the Company.

Therefore, EPS is presented for the Company’s single class of common stock up to the time the tracking stock was issued.

EPS is presented prospectively under the two-class method starting on the date of initial distribution of the tracking stock.

Refer to Note 9 for information related to the Company’s tracking stock.

The computation of basic and diluted EPS is shown on the following page:

(In thousands, except per share amounts)

Net income (loss)

Years ended December 31,

Earnings attribution

Single class of common stock (through 6/20/2023) *

Class A common stock (6/21/2023 - 12/31/2023)

Class A restricted stock awards (6/21/2023 - 12/31/2023)

Class B common stock (6/21/2023 - 12/31/2023)

Class B restricted stock awards (6/21/2023 - 12/31/2023)

Forfeitable dividends declared on unvested stock-based awards

* Common stock and restricted stock participated in earnings 1 :1 and are shown on a combined basis through 6/20/2023 consistent with historical presentation

Years ended December 31,

EPS data for single class of common stock through 6/20/2023

Weighted average shares used to compute basic earnings per share *

1 unchanged sentence

Dilutive effect of restricted stock units

Dilutive effect of performance stock units

Weighted average shares used to compute diluted earnings per share

Earnings (loss) per share

Diluted EPS for 2022 excludes 248,706 of target performance stock units based on the guidance for contingently issuable shares, which requires exclusion when, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period.

Refer to Note 9 for additional information regarding performance stock unit awards.

Diluted EPS for 2020 excludes 937,424 options to purchase our common stock because their effect would be anti-dilutive.

Earnings per common share (single class of common stock)

June 21, 2023 - December 31, 2023

EPS data for dual-class common stock 6/21/2023 - 12/31/2023

Weighted average shares used to compute basic earnings per share **

Dilutive effect of stock option awards

Dilutive effect of restricted stock units

Dilutive effect of performance stock units

Weighted average shares used to compute diluted earnings per share

Earnings per common share (dual-class structure)

** Does not include unvested restricted stock, which averaged 1.8 million and 0.4 million for Class A and Class B, respectively, for the period June 21, 2023 through December 31, 2023

Unvested restricted stock awards have the right to receive nonforfeitable dividends on the same basis as common shares;

therefore, unvested restricted stock is considered a participating security for the purpose of calculating EPS.

Historically, the Company has shown EPS for its common stock and unvested restricted stock on a combined basis since both instruments participate in net earnings on the same basis and the resulting EPS is typically the same.

Starting under the two-class method, the Company reports separately the net earnings allocated away from holders of Class A and Class B common stock to holders of unvested restricted stock awards.

Unvested restricted stock units and performance stock units include forfeitable dividend rights that are subject to the vesting conditions of the underlying awards;

therefore, these awards are not considered participating securities and should not be allocated undistributed earnings for the purpose of calculating EPS.

However, dividends or dividend equivalents declared and charged to retained earnings for these awards reduce the amount of net earnings available for distribution to common stockholders and should be reflected as such under the two-class method.

For accounting purposes, Class B’s participation rights are, in substance, discretionary based on the power of the Company’s Board of Directors to add or modify expense allocation policies, redefine CORE assets, and redetermine CORE’s per-ton usage fees at any time, in its sole discretion, without shareholder approval.

Therefore, no amount of the Company’s net earnings shall be allocated to Class B for the purpose of calculating EPS other than actual dividends declared during the period for the tracking stock.

Refer to Note 9 for information regarding dividends declared on Class B common stock.

Diluted EPS was calculated using the treasury stock method for stock options and restricted stock units.

For performance stock units, the awards were first evaluated under the contingently issuable shares guidance, which requires a determination as to whether shares would be issuable if the end of the reporting period were the end of the contingency period.

For shares determined to be issuable under performance stock unit awards, the treasury stock method was then applied to determine the dilutive impact of the awards, if any.

Unvested restricted stock awards are considered potential common shares as well as participating securities, as discussed previously, and were included in diluted EPS using the more dilutive of the treasury stock method or the two-class method.

Since these awards share in dividends on a 1 :1 basis with common shares, applying the treasury stock method would be antidilutive compared to the basic EPS calculation that allocates earnings to participating securities under the two-class method discussed previously.

Diluted EPS for the period from January 1, 2023 through June 20, 2023, the period for which a single class of common stock existed, excluded all outstanding restricted stock units, or 684,151 units in total, because the effect would have been antidilutive under the treasury stock method.

In addition, diluted EPS for the same period excluded outstanding performance stock units originally granted in 2022, or 248,706 units at target, based on the guidance for contingently issuable shares, which requires exclusion when shares would not be issuable if the end of the reporting period were the end of the contingency period.

For the period from June 21,2023 through December 31, 2023, the Company’s ability to convert Class B common shares into Class A common shares, as discussed previously in Note 9, is a contingency that will not be reflected in the diluted EPS for Class A under the if-converted method until such time that the required Board resolutions occur, if ever.

Diluted EPS for 2022 excluded 248,706 of target performance stock units based on the guidance for contingently issuable shares discussed earlier.

NOTE 15—SUBSEQUENT EVENTS

Shortly after the balance sheet date, the Company repaid $ 20 million of the $ 25 million of borrowings under the Revolving Credit Facility using funds from current operations.

At a later date, on February 15, 2023, the Company entered into the Second Amended and Restated Credit and Security Agreement, which includes multiple lending parties and provides additional borrowing capacity compared to the facility utilized in 2022.

The new facility, which has a maturity date of February 15, 2026, provides an initial aggregate revolving commitment of $ 125.0 million as well as an accordion feature of $ 50 million subject to certain terms and conditions, including lender’s consent.

The aggregate revolving commitment had a borrowing base of $ 66.3 million at the closing date of the new facility after consideration of collateral and reserve requirements.

The Company utilized the new facility to borrow an additional $ 20 million and used $ 10 million of the proceeds to pay down related-party debt associated with the acquisition of Ramaco Coal.

The remaining availability under the new facility was $ 41.3 million at the closing date after outstanding borrowings of $ 25.0 million.

Revolving loans under the new facility bear interest at either the base rate plus 1.50 % or the Secured Overnight Financing Rate plus 2.00 %.

The base rate equals the highest of the administrative agent’s prime rate, the Federal Funds Effective Rate plus 0.5 %, or 3 %.

The terms of the new facility include covenants limiting the ability of the Company to incur additional indebtedness, make investments or loans, incur liens, consummate mergers and similar fundamental changes, make restricted payments, and enter into transactions with affiliates.

The terms of the new facility also contain a financial covenant that requires the Company to maintain a fixed charge coverage ratio of not less than 1.10 :1.00 calculated as of the last day of each fiscal quarter starting with the first quarter of 2023.

The new facility also contains certain compensating balance requirements, which include that the Company maintain an average daily cash balance of $ 5 million, as determined on a monthly basis, to assure future credit availability.

On February 1, 2024, the Company announced that the Board of Directors declared a cash dividend of $ 0.2416 per share of Class B common stock, which will be payable on March 15, 2024 to shareholders of record on March 1, 2024.

In February 2024, the Company completed the purchase of an existing coal preparation plant, which will be relocated to the Company’s Maben Complex.

The purchase price of the plant is $ 3 million.

The Company anticipates

spending an additional $ 8 million in initial development capital expenditures related to the plant in 2024.

These costs would include amounts related to the relocation, reassembly, and expansion of the facility at Maben.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data