Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38003 RAMACO RESOURCES, INC. (Exact name of registrant as specified in its charter) Delaware 38-4018838 (Stat ...

[PART I](index=5&type=section&id=PART%20I) This section details the company's core business, operational risks, property assets, and regulatory compliance [Business](index=5&type=section&id=Item%201.%20Business) Ramaco Resources is a metallurgical coal producer focused on developing high-quality assets and increasing production to approximately **5 million clean tons** annually - Ramaco is a pure-play metallurgical coal company with **39 million reserve tons** and **769 million resource tons** of high-quality metallurgical coal[15](index=15&type=chunk) - The company plans to increase annual production from its existing portfolio to approximately **5 million clean tons** of metallurgical coal, contingent on market conditions, permitting, and capital deployment[23](index=23&type=chunk)[29](index=29&type=chunk) - As of **December 31, 2021**, the company had **454 employees**, none of whom are covered by collective bargaining agreements[125](index=125&type=chunk) [Our Projects](index=10&type=section&id=Our%20Projects) The company's core projects include Elk Creek, Berwind, Knox Creek, and RAM Mine, strategically located to serve domestic and international steel markets Key Mining Complexes Overview | Property | Location | Controlled Mineral (acres) | Key Features | | :--- | :--- | :--- | :--- | | **Elk Creek** | Southern West Virginia | ~20,200 | Production stage; 16 mineable seams of high-vol metallurgical coal; 700 ton/hour preparation plant. | | **Berwind** | WV/VA Border | ~41,300 | Development stage; low-volatile coal; acquired adjacent Amonate Assets with a 1.3M ton/annum plant. | | **Knox Creek** | Southwestern Virginia | ~62,100 | Includes a 650 ton/hour preparation plant; processes Berwind coal and third-party coal. | | **RAM Mine** | Southwestern Pennsylvania | ~1,570 | Development stage; high-vol coal from Pittsburgh seam; awaiting final permit. | - In **December 2021**, the company acquired the **Amonate Assets** from Coronado for **$30 million** in cash. This acquisition included a mine complex and a **1.3 million ton per annum** capacity coal preparation plant adjacent to the Berwind Complex[20](index=20&type=chunk)[49](index=49&type=chunk) - The company plans to upgrade the Elk Creek Preparation plant to a capacity of **1,000 raw tons per hour**, increasing the complex's annual clean capacity to **2.5 million tons per year**, with completion expected in 2023[42](index=42&type=chunk) [Customers and Competition](index=15&type=section&id=Customers%20and%20Competition) Ramaco markets metallurgical coal to North American and international customers, facing significant customer concentration and competition from major producers Customer Concentration | Year | Top 3 Customers' % of Total Revenue | Top 3 Customers' % of Total A/R at Year-End | | :--- | :--- | :--- | | **2021** | 58% | 58% | | **2020** | 70% | 46% | - In 2021, the company sold **2.3 million tons** of coal, with **51%** sold to North American markets and **49%** to export markets (excluding Canada), primarily Europe[62](index=62&type=chunk) - Principal domestic competitors include Alpha Metallurgical Resources, Inc., Blackhawk Mining, LLC, Coronado, Arch Resources, Inc., Peabody Energy Corporation and Warrior Met Coal, Inc[64](index=64&type=chunk) [Environmental, Health and Safety and Other Regulatory Matters](index=17&type=section&id=Environmental%2C%20Health%20and%20Safety%20and%20Other%20Regulatory%20Matters) Operations are subject to extensive environmental, health, and safety regulations, with compliance costs and climate change policies posing significant risks - Operations are governed by numerous laws, including **SMCRA, Clean Air Act, Clean Water Act, and the MINE Act**, which establish comprehensive standards for mining, reclamation, emissions, and safety[67](index=67&type=chunk)[70](index=70&type=chunk)[85](index=85&type=chunk)[94](index=94&type=chunk)[109](index=109&type=chunk) - The company is required to secure performance of its reclamation obligations through surety bonds or other financial assurances. While not currently required to post collateral, the surety has the right to demand it[80](index=80&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - Climate change regulations and initiatives, such as the Paris Agreement and potential EPA rules on greenhouse gases, could reduce demand for coal, particularly for power generation, and increase operating costs[97](index=97&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse business, regulatory, and company-specific risks, including market volatility, stringent environmental laws, and internal control weaknesses [Risks Related to Our Business](index=41&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include COVID-19 impacts, customer concentration, steel industry dependence, price volatility, and inherent operational hazards - The COVID-19 pandemic has adversely affected business operations, causing volatility in commodity prices and a significant decline in demand for steel at times[140](index=140&type=chunk)[141](index=141&type=chunk) - The company has significant customer concentration, with three customers accounting for approximately **58%** of total revenue for the 12 months ended **December 31, 2021**[151](index=151&type=chunk) - Sales commitments are typically not long-term (generally no longer than one year), exposing the company to fluctuations in market pricing for metallurgical coal[157](index=157&type=chunk) [Risks Related to Environmental, Health, Safety and Other Regulations](index=67&type=section&id=Risks%20Related%20to%20Environmental%2C%20Health%2C%20Safety%20and%20Other%20Regulations) Extensive environmental, health, and safety regulations, particularly climate change policies, pose significant cost and operational risks - The Biden Administration's climate goals, including rejoining the Paris Agreement and targeting **carbon-free electricity by 2035**, could accelerate the decline in demand for coal in the United States[231](index=231&type=chunk) - Activism aimed at limiting climate change, including investor divestment campaigns and pressure on lenders, could interfere with business activities and the ability to access capital[252](index=252&type=chunk)[253](index=253&type=chunk)[255](index=255&type=chunk) - The company and its significant stockholders are subject to the **Applicant Violator System (AVS)**, which can block the issuance of new mining permits if there are outstanding, unabated violations[226](index=226&type=chunk)[227](index=227&type=chunk) [Risks Related to Our Company](index=79&type=section&id=Risks%20Related%20to%20Our%20Company) Company-specific risks include dividend limitations, a material weakness in internal controls, and increased compliance costs post-emerging growth status - A **material weakness** in internal controls over financial reporting was identified in 2022 related to information technology general controls (**ITGCs**) in the areas of user access and segregation of duties[286](index=286&type=chunk) - The company will cease to be an "emerging growth company" on **December 31, 2022**, which will require compliance with additional reporting requirements, such as an auditor's attestation on internal controls[130](index=130&type=chunk)[272](index=272&type=chunk) - The indenture governing the company's Senior Notes imposes restrictive covenants that may limit operating and financial flexibility, including limitations on incurring additional debt, paying dividends, and making certain investments[292](index=292&type=chunk)[295](index=295&type=chunk) [Unresolved Staff Comments](index=93&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the Securities and Exchange Commission - None[314](index=314&type=chunk) [Properties](index=93&type=section&id=Item%202.%20Properties) This section details the company's mining properties, including mineral resources and reserves, under new Regulation S-K 1300 requirements Summary Mineral Resources (as of Dec 31, 2021) | Category | Amount (000 Tons) | | :--- | :--- | | Measured Mineral Resources | 652,434 | | Indicated Mineral Resources | 116,336 | | **Measured + Indicated Total** | **768,770** | | Inferred Mineral Resources | 5,465 | Summary Mineral Reserves (as of Dec 31, 2021) | Category | Amount (000 Tons) | | :--- | :--- | | Proven Mineral Reserves | 34,175 | | Probable Mineral Reserves | 4,985 | | **Proven + Probable Total** | **39,160** | - Proven and probable reserves at the Berwind/Knox Creek and Elk Creek complexes decreased by approximately **92.7%** and **74.7%**, respectively, from 2020. This was primarily due to changes in reserve classification determination under the new requirements of **subpart 1300 of Regulation S-K**[363](index=363&type=chunk) [Legal Proceedings](index=109&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no pending litigation expected to have a material adverse effect on its financial condition or operations - The company reports no pending litigation expected to have a material adverse effect on its financial condition[369](index=369&type=chunk) [Mine Safety Disclosures](index=109&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures, as required by the Dodd-Frank Act, are provided in Exhibit 95.1 of the Annual Report - Mine safety disclosures required by **Section 1503(a) of the Dodd-Frank Act** are provided in **Exhibit 95.1**[370](index=370&type=chunk) [PART II](index=110&type=section&id=PART%20II) This section covers the company's common equity market, selected financial data, management's discussion and analysis, and market risk disclosures [Market for Registrant's Common Equity and Related Shareholder Matters](index=110&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%20and%20Related%20Shareholder%20Matters) This section details the company's common stock and senior notes listings on NASDAQ and recent dividend declarations - Common Stock (**METC**) and **9.00% Senior Notes** due 2026 (**METCL**) are traded on the **NASDAQ Global Select Market**[373](index=373&type=chunk) - In December 2021, the board declared a cash dividend of **$0.0567 per share**, payable in March 2022, which was later doubled[374](index=374&type=chunk) [Selected Financial Data](index=110&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected historical financial data shows significant revenue growth and a return to profitability in 2021, with increased tons sold Selected Financial and Operating Data (2019-2021) | (In thousands, except per share data) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Revenue** | $283,394 | $168,915 | $230,213 | | **Operating Income (Loss)** | $39,533 | $(19,093) | $29,532 | | **Net Income (Loss)** | $39,759 | $(4,907) | $24,934 | | **Diluted EPS** | $0.90 | $(0.12) | $0.61 | | **Cash from Operating Activities** | $53,340 | $13,312 | $42,382 | | **Total Tons Sold** | 2,286 | 1,749 | 1,950 | | **Total Assets** | $329,033 | $228,623 | $226,813 | | **Total Stockholders' Equity** | $211,074 | $169,095 | $170,083 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=112&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strong 2021 financial recovery, driven by increased demand and pricing, improved liquidity, and projected capital expenditures [Results of Operations](index=114&type=section&id=Results%20of%20Operations) Revenue increased **68%** in 2021 to **$283.4 million**, leading to a net income of **$39.8 million** and a significant rise in Adjusted EBITDA Financial Performance Summary (2020 vs. 2021) (In thousands) | (In thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Revenue** | $283,394 | $168,915 | | **Operating Income (Loss)** | $39,533 | $(19,093) | | **Net Income (Loss)** | $39,759 | $(4,907) | | **Adjusted EBITDA** | $79,042 | $18,455 | Company Produced Coal Sales (2020 vs. 2021) (In thousands, except per ton) | (In thousands, except per ton) | 2021 | 2020 | | :--- | :--- | :--- | | **Coal Sales Revenue** | $276,725 | $166,488 | | **Tons Sold** | 2,239 | 1,723 | | **Cash Cost Per Ton Sold (FOB Mine)** | $70 | $72 | [Liquidity and Capital Resources](index=120&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved to **$61.0 million**, with strong operating cash flow and projected capital expenditures for 2022 - Available liquidity was **$61.0 million** as of **December 31, 2021**, comprising cash and availability under the Revolving Credit Facility[430](index=430&type=chunk) - Capital expenditures for 2022 are anticipated to be approximately **$65-85 million**, focused on production growth and refurbishing the **Amonate Assets** preparation plant[433](index=433&type=chunk) - In July 2021, the company completed an offering of **$34.5 million** of **9.00% Senior Unsecured Notes due 2026**[425](index=425&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=130&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces primary market risks from volatile metallurgical coal prices and indirect foreign exchange rate impacts - The primary market risk is commodity price risk, as metallurgical coal is sold under short-term or spot contracts, exposing the company to price volatility[452](index=452&type=chunk) - Foreign exchange risk is indirect. A stronger U.S. dollar could make the company's coal less competitive against non-U.S. suppliers in international markets[454](index=454&type=chunk) [Financial Statements and Supplementary Data](index=131&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's consolidated financial statements for 2021, including the auditor's report and detailed notes [Report of Independent Registered Public Accounting Firm](index=132&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor's report confirms fair financial presentation but highlights critical audit matters regarding ITGCs and Asset Retirement Obligations - The auditor identified a critical audit matter related to a **material weakness** in internal control over financial reporting concerning ineffective **ITGCs** in user access and dependent business process controls[463](index=463&type=chunk) - A second critical audit matter was the estimation of **Asset Retirement Obligations (ARO)**, which totaled **$22.6 million** and involved a high degree of subjectivity and judgment regarding assumptions like costs, timing, and discount rates[467](index=467&type=chunk)[468](index=468&type=chunk) [Consolidated Financial Statements](index=137&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show total assets of **$329.0 million**, total equity of **$211.1 million**, and net income of **$39.8 million** in 2021 Consolidated Balance Sheet Highlights (Dec 31, 2021) (In thousands) | (In thousands) | Amount | | :--- | :--- | | **Total Current Assets** | $86,761 | | **Property, Plant and Equipment, net** | $227,077 | | **Total Assets** | **$329,033** | | **Total Current Liabilities** | $46,660 | | **Total Liabilities** | $117,959 | | **Total Stockholders' Equity** | **$211,074** | Consolidated Statement of Operations (Year Ended Dec 31, 2021) (In thousands) | (In thousands) | Amount | | :--- | :--- | | **Revenue** | $283,394 | | **Total Costs and Expenses** | $243,861 | | **Operating Income** | $39,533 | | **Net Income** | **$39,759** | [Notes to Consolidated Financial Statements](index=142&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes provide detailed disclosures on accounting policies, property, debt, leases, stock compensation, contingencies, and related party transactions - In **December 2021**, the company acquired the **Amonate Assets** from Coronado for **$30 million** in cash, which included a mine complex, reserves, and a **1.3 million ton per annum** preparation plant[542](index=542&type=chunk) - Total outstanding debt as of **December 31, 2021**, was **$43.4 million**, including a **$3.3 million** term loan, **$7.7 million** in equipment loans, and **$32.4 million** in Senior Notes (net of discount)[549](index=549&type=chunk) - A jury returned a verdict in the company's favor for **$32.7 million** in a lawsuit related to a 2018 silo failure. However, a post-trial motion in March 2022 reduced the award to **$1.8 million**. The company is considering an appeal[579](index=579&type=chunk)[580](index=580&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=168&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting or financial disclosure matters - None[592](index=592&type=chunk) [Controls and Procedures](index=168&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management identified a material weakness in internal controls over financial reporting related to IT general controls as of December 31, 2021 - Management identified a **material weakness** in internal control over financial reporting as of **December 31, 2021**[595](index=595&type=chunk) - The **material weakness** is related to **ITGCs**, specifically in the areas of user access and segregation of duties for certain IT systems supporting financial reporting[593](index=593&type=chunk)[595](index=595&type=chunk) - The company has begun remediation efforts, including modifying **ITGCs** over user access and implementing additional detective controls[596](index=596&type=chunk) [Other Information](index=168&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[598](index=598&type=chunk) [PART III](index=170&type=section&id=PART%20III) This section incorporates by reference information regarding directors, executive compensation, security ownership, related party transactions, and accountant fees from the proxy statement [Directors, Executive Officers and Corporate Governance](index=170&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the **Proxy Statement for the 2022 Annual Meeting of Stockholders**[602](index=602&type=chunk) [Executive Compensation](index=170&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2022 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference to the **Proxy Statement for the 2022 Annual Meeting of Stockholders**[603](index=603&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=170&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership details for beneficial owners and management are incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the **Proxy Statement for the 2022 Annual Meeting of Stockholders**[604](index=604&type=chunk) [Certain Relationships and Related Persons Transactions](index=170&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Persons%20Transactions) Information on certain relationships and related person transactions is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the **Proxy Statement for the 2022 Annual Meeting of Stockholders**[605](index=605&type=chunk) [Principal Accountant Fees and Services](index=170&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Principal accountant fees and services information is incorporated by reference from the 2022 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference to the **Proxy Statement for the 2022 Annual Meeting of Stockholders**[606](index=606&type=chunk) [PART IV](index=171&type=section&id=PART%20IV) This section lists the exhibits and financial statement schedules filed as part of the Annual Report [Exhibits and Financial Statement Schedules](index=171&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Annual Report, including key organizational and debt documents - This section includes a list of all exhibits filed with the 10-K, such as material contracts, debt indentures, and officer certifications[609](index=609&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38003 RAMACO RESOURCES, INC. (Exact name of registrant as specified in its charter) Delaware 38-4018838 ( ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38003 RAMACO RESOURCES, INC. (Exact name of registrant as specified in its charter) Delaware 38-4018838 (State ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | Delaware | 38-4018838 | | --- | --- | | (State or other jurisdiction | (I.R.S. Employer | | of incorporation or organization) | Identification No.) | 250 West Main Street, Suite 1800 Lexington, Kentucky 40507 (Address of principal executive offices) (Zip code) (859) 244-7455 (Registrant's telephone number, i ...

Table of Contents TABLE OF CONTENTS Page PART I | ITEM 1. | Business | 4 | | --- | --- | --- | | ITEM 1A. | Risk Factors | 21 | | ITEM 1B. | Unresolved Staff Comments | 50 | | ITEM 2. | Properties | 50 | | ITEM 3. | Legal Proceedings | 52 | | ITEM 4. | Mine Safety Disclosures | 53 | | | PART II | | | ITEM 5. | Market for Registrant's Common Equity and Related Shareholder Matters | 54 | | ITEM 6. | Selected Financial Data | 54 | | | Management's Discussion and Analysis of Financial Condition and Results of | ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38003 RAMACO RESOURCES, INC. (Exact name of registrant as specified in its charter) | Delaware | 38-40188 ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining the company's business, significant accounting policies, debt, equity, commitments, revenue, income taxes, earnings per share, and related party transactions [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet (in thousands) | Metric | June 30, 2020 | December 31, 2019 | | :-------------------------------- | :------------ | :---------------- | | **Assets** | | | | Total current assets | $54,175 | $44,323 | | Property, plant and equipment – net | $183,145 | $178,202 | | Total Assets | $242,101 | $226,813 | | **Liabilities** | | | | Total current liabilities | $27,837 | $26,411 | | Total liabilities | $65,568 | $56,730 | | **Stockholders' Equity** | | | | Total stockholders' equity | $176,533 | $170,083 | | Total Liabilities and Stockholders' Equity | $242,101 | $226,813 | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $36,374 | $65,761 | $78,310 | $123,221 | | Total costs and expenses | $40,673 | $52,872 | $81,468 | $102,083 | | Operating income (loss) | $(4,299) | $12,889 | $(3,158) | $21,138 | | Other income | $8,504 | $194 | $9,714 | $492 | | Net income | $2,652 | $10,613 | $4,614 | $17,496 | | Basic EPS | $0.06 | $0.26 | $0.11 | $0.43 | | Diluted EPS | $0.06 | $0.26 | $0.11 | $0.43 | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Total Stockholders' Equity | | :--------------------------- | :----------- | :------------------------- | :-------------------------- | :------------------------- | | Balance at January 1, 2020 | $410 | $154,957 | $14,716 | $170,083 | | Stock-based compensation | $17 | $906 | — | $923 | | Net income | — | — | $1,962 | $1,962 | | Balance at March 31, 2020 | $427 | $155,863 | $16,678 | $172,968 | | Restricted stock surrendered | $(1) | $(192) | — | $(193) | | Stock-based compensation | — | $1,106 | — | $1,106 | | Net income | — | — | $2,652 | $2,652 | | Balance at June 30, 2020 | $426 | $156,777 | $19,330 | $176,533 | | Balance at January 1, 2019 | $401 | $150,926 | $(10,218) | $141,109 | | Stock-based compensation | $7 | $887 | — | $894 | | Net income | — | — | $6,883 | $6,883 | | Balance at March 31, 2019 | $408 | $151,813 | $(3,335) | $148,886 | | Stock-based compensation | $1 | $1,059 | — | $1,060 | | Net income | — | — | $10,613 | $10,613 | | Balance at June 30, 2019 | $409 | $152,872 | $7,278 | $160,559 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash from operating activities | $6,833 | $13,031 | | Purchases of property, plant and equipment | $(18,019) | $(19,737) | | Net cash from financing activities | $15,528 | $5,213 | | Net change in cash and cash equivalents | $4,342 | $(1,493) | | Cash and cash equivalents, end of period | $11,207 | $5,887 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1—BUSINESS](index=12&type=section&id=NOTE%201%E2%80%94BUSINESS) - The company is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania[31](index=31&type=chunk) - The COVID-19 pandemic has adversely affected the company, leading to customer delays/curtailments reducing 2020 contracted sales volumes by **up to 12%**[33](index=33&type=chunk) - In response to COVID-19, the company implemented a two-week operational furlough for **203 employees**, temporary **30% executive salary reductions** for certain executives, partial closure of the Berwind mine affecting **44 jobs**, and reduction/deferral of non-essential capital expenditures[35](index=35&type=chunk)[37](index=37&type=chunk) - The company borrowed an additional **$13.2 million** under two promissory notes to improve liquidity and limit employee furloughs[36](index=36&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The company classifies highly-liquid instruments with original maturity of three months or less as cash equivalents[42](index=42&type=chunk) - Self-insured losses for workers' compensation claims are accrued based on estimates, with an estimated aggregate liability of **$1.2 million** at June 30, 2020[43](index=43&type=chunk) - The SBA Paycheck Protection Program Loan (PPP Loan) is accounted for as an in-substance government grant, with proceeds initially recognized as deferred income liability and subsequently reduced as income is recognized over the period related costs are incurred[44](index=44&type=chunk) - Sales to four customers accounted for **approximately 73% of total revenue** for the three months ended June 30, 2020, and sales to two customers accounted for **approximately 50%** for the six months ended June 30, 2020[48](index=48&type=chunk) - The company adopted ASU 2016-13 (Financial Instruments—Credit Losses) and ASU 2018-15 (Internal-Use Software) effective January 1, 2020, with no material impact on consolidated financial statements[49](index=49&type=chunk)[50](index=50&type=chunk) [NOTE 3—PROPERTY, PLANT AND EQUIPMENT](index=16&type=section&id=NOTE%203%E2%80%94PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) Property, Plant and Equipment (in thousands) | Metric | June 30, 2020 | December 31, 2019 | | :-------------------------------- | :------------ | :---------------- | | Plant and equipment | $154,337 | $142,773 | | Construction in process | $6,650 | $11,986 | | Capitalized mine development cost | $67,831 | $58,773 | | Less: accumulated depreciation and amortization | $(45,673) | $(35,330) | | Total property, plant and equipment, net | $183,145 | $178,202 | Depreciation and Amortization (in thousands) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation of plant and equipment | $4,240 | $3,416 | $8,415 | $6,436 | | Amortization of capitalized mine development costs | $1,101 | $1,406 | $1,928 | $2,502 | | Total depreciation and amortization | $5,341 | $4,822 | $10,343 | $8,938 | [NOTE 4—DEBT](index=18&type=section&id=NOTE%204%E2%80%94DEBT) - The company has a Revolving Credit Facility with KeyBank, amended on February 20, 2020, consisting of a **$10.0 million term loan** and **up to $30.0 million revolving line of credit**, maturing December 31, 2023[54](index=54&type=chunk)[55](index=55&type=chunk) - As of June 30, 2020, **$8.0 million** was outstanding on the Revolving Credit Facility with **$22.0 million** remaining availability, and the Term Loan had an outstanding principal balance of **$8.3 million**[55](index=55&type=chunk)[56](index=56&type=chunk) - An Equipment Financing Loan of approximately **$4.7 million** was entered into on April 16, 2020, with an outstanding principal balance of **$4.5 million** at June 30, 2020[58](index=58&type=chunk) [NOTE 5—SBA PAYCHECK PROTECTION PROGRAM LOAN](index=18&type=section&id=NOTE%205%E2%80%94SBA%20PAYCHECK%20PROTECTION%20PROGRAM%20LOAN) - On April 20, 2020, the company received **approximately $8.4 million** from a PPP Loan, used to retain employees, maintain payroll, and make lease, interest, and utility payments[59](index=59&type=chunk) - The PPP Loan matures on April 16, 2022, bears **1% interest**, and may be forgiven by the SBA based on documented expenditures for payroll, rent, mortgage interest, and utilities[60](index=60&type=chunk)[61](index=61&type=chunk) - **Approximately $7.3 million** of PPP Loan proceeds used for eligible expenses through June 30, 2020, has been recognized as other income, with the remaining **$1.1 million** presented as deferred income[64](index=64&type=chunk)[65](index=65&type=chunk) [NOTE 6—EQUITY](index=20&type=section&id=NOTE%206%E2%80%94EQUITY) - The company has a stock-based compensation plan with **3.3 million shares** available for future awards at June 30, 2020[66](index=66&type=chunk) - Compensation expense related to restricted stock awards totaled **$1.1 million** and **$2.0 million** for the three and six months ended June 30, 2020, respectively[68](index=68&type=chunk) Restricted Awards Activity | Metric | Shares | Weighted Average Grant Date Fair Value | | :-------------------------- | :------- | :------------------------------------- | | Outstanding at December 31, 2019 | 1,628,241 | $6.32 | | Granted | 1,763,172 | $3.04 | | Vested | (419,844) | $6.17 | | Forfeited | — | — | | Outstanding at June 30, 2020 | 2,971,569 | $4.40 | [NOTE 7—COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=NOTE%207%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) - As of June 30, 2020, the company had **$15.1 million** in reclamation bonding requirements supported by surety bonds and **$0.3 million** in surety bonds for performance obligations[70](index=70&type=chunk) - Contingent liabilities under take-or-pay transportation arrangements totaled **$4.1 million**, expiring March 31, 2021[71](index=71&type=chunk) - The company is involved in litigation against Federal Insurance Company and ACE American Insurance Company regarding an insurance claim for a partial silo structural failure in November 2018, with a trial scheduled for December 8, 2020[74](index=74&type=chunk) [NOTE 8—REVENUE](index=22&type=section&id=NOTE%208%E2%80%94REVENUE) Disaggregated Revenue (in thousands) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Domestic revenues | $20,686 | $39,544 | $51,218 | $76,116 | | Export revenues | $15,688 | $26,217 | $27,092 | $47,105 | | Total revenues | $36,374 | $65,761 | $78,310 | $123,221 | - As of June 30, 2020, outstanding performance obligations for the remainder of 2020 included **approximately 0.8 million tons** at an average fixed price of **$93/ton** and **0.1 million tons** with index-based pricing[75](index=75&type=chunk) - **0.2 million tons** of the fixed-price contracts at **$91/ton** may not ship in 2020 due to material adverse change and force majeure notices[75](index=75&type=chunk) [NOTE 9—INCOME TAXES](index=22&type=section&id=NOTE%209%E2%80%94INCOME%20TAXES) - The effective tax rate for the three and six months ended June 30, 2020, excluding a discrete item for restricted stock awards, was **21%** and **16%**, respectively[77](index=77&type=chunk) - The effective tax rate for the three and six months ended June 30, 2019, was **17%** each period[77](index=77&type=chunk) [NOTE 10—EARNINGS PER SHARE](index=24&type=section&id=NOTE%2010%E2%80%94EARNINGS%20PER%20SHARE) Earnings Per Share (in thousands, except per share amounts) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $2,652 | $10,613 | $4,614 | $17,496 | | Weighted average shares used to compute basic EPS | 42,704 | 40,869 | 42,232 | 40,737 | | Dilutive effect of share-based awards | — | 96 | — | 73 | | Weighted average shares used to compute diluted EPS | 42,704 | 40,965 | 42,232 | 40,810 | | Basic EPS | $0.06 | $0.26 | $0.11 | $0.43 | | Diluted EPS | $0.06 | $0.26 | $0.11 | $0.43 | [NOTE 11—RELATED PARTY TRANSACTIONS](index=24&type=section&id=NOTE%2011%E2%80%94RELATED%20PARTY%20TRANSACTIONS) - The company acquired coal reserves and surface rights through mineral leases and surface rights agreements with Ramaco Coal, LLC, a related party[80](index=80&type=chunk) - Royalties paid to Ramaco Coal, LLC totaled **$1.1 million** and **$2.3 million** for the three and six months ended June 30, 2020, respectively[80](index=80&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, highlighting the impact of the COVID-19 pandemic on revenue, costs, and liquidity, detailing operational responses, financial results for the quarter and six-month periods, and the company's capital resources and non-GAAP financial measures [Overview](index=25&type=section&id=Overview) - The company is a metallurgical coal operator with a **265-million-ton reserve base** and plans to grow production to **4-4.5 million clean tons**, subject to market conditions[83](index=83&type=chunk) - The COVID-19 pandemic significantly impacted Q2 2020 results, leading to a global economic slowdown, reduced demand, and lower spot prices for metallurgical coal[85](index=85&type=chunk)[87](index=87&type=chunk) - Customer contractual obligations for 2020 sales volumes are expected to be reduced by **up to 12%** due to COVID-19[86](index=86&type=chunk) - Company responses include a two-week employee furlough, **30% executive salary reductions**, partial closure of the Berwind mine (affecting **44 jobs**), and deferral of non-essential capital expenditures[88](index=88&type=chunk)[89](index=89&type=chunk)[94](index=94&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Consolidated Statement of Operations Data (in thousands) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $36,374 | $65,761 | $78,310 | $123,221 | | Total costs and expenses | $40,673 | $52,872 | $81,468 | $102,083 | | Operating income (loss) | $(4,299) | $12,889 | $(3,158) | $21,138 | | Other income | $8,504 | $194 | $9,714 | $492 | | Net income | $2,652 | $10,613 | $4,614 | $17,496 | | Adjusted EBITDA | $10,811 | $19,093 | $19,228 | $32,778 | - Net income and Adjusted EBITDA in Q2 2020 were **75%** and **43% lower**, respectively, than Q2 2019, due to lower realized pricing and volumes[95](index=95&type=chunk) [Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019](index=28&type=section&id=Three%20Months%20Ended%20June%2030%2C%202020%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202019) Coal Sales Revenue (Three Months Ended June 30, in thousands) | Metric | 2020 | 2019 | Increase (Decrease) | | :-------------------- | :----- | :----- | :------------------ | | Company Produced Revenue | $36,374 | $62,516 | $(26,142) | | Company Produced Tons Sold | 362 | 499 | (137) | | Purchased from Third Parties Revenue | $— | $3,245 | $(3,245) | | Purchased from Third Parties Tons Sold | — | 26 | (26) | - Coal sales revenue decreased by **42%** to **$36.4 million** in Q2 2020, driven by lower sales volumes (**31% decrease**) and a **22% decline** in revenue per ton sold (FOB mine) to **$91/ton**[96](index=96&type=chunk)[97](index=97&type=chunk) - Cost of sales decreased to **$30.1 million** in Q2 2020 due to lower sales volumes, while cash cost per ton sold (FOB mine) slightly increased to **$74**[99](index=99&type=chunk) - Other income increased significantly to **$8.5 million** in Q2 2020, primarily due to the recognition of **$7.3 million** from the anticipated forgiveness of the PPP Loan[102](index=102&type=chunk) [Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019](index=31&type=section&id=Six%20Months%20Ended%20June%2030%2C%202020%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202019) Coal Sales Revenue (Six Months Ended June 30, in thousands) | Metric | 2020 | 2019 | Increase (Decrease) | | :-------------------- | :----- | :----- | :------------------ | | Company Produced Revenue | $78,310 | $115,216 | $(36,906) | | Company Produced Tons Sold | 778 | 942 | (164) | | Purchased from Third Parties Revenue | $— | $8,005 | $(8,005) | | Purchased from Third Parties Tons Sold | — | 61 | (61) | - Coal sales revenue decreased by **32%** to **$78.3 million** for the six months ended June 30, 2020, due to lower sales volumes (**22% decrease**) and a **17% decline** in revenue per ton sold (FOB mine) to **$92/ton**[107](index=107&type=chunk) - Cost of sales decreased to **$61.1 million**, primarily due to lower sales volumes, while cash cost per ton sold (FOB mine) decreased to **$70**[109](index=109&type=chunk) - Other income increased to **$9.7 million**, largely driven by the **$7.3 million** recognized from the anticipated forgiveness of the PPP Loan[112](index=112&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) - At June 30, 2020, the company had **$9.8 million** in cash and cash equivalents and **$22.0 million** available under existing credit agreements[117](index=117&type=chunk) - Significant cash uses in the first six months of 2020 included **$18.0 million in capital expenditures**, primarily for mine development and infrastructure[118](index=118&type=chunk) - Net borrowings of **$16.3 million** were made to increase cash position and fund capital expenditures during the COVID-19 pandemic[120](index=120&type=chunk) - The company believes current cash, operating cash flows, and available credit will be sufficient to meet capital and operating plans, but is also exploring further capital expenditure reductions and alternative financing[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - The company's indebtedness includes a Revolving Credit Facility (**$8.0 million outstanding**, **$22.0 million available**), a Term Loan (**$8.3 million outstanding**), and an Equipment Financing Loan (**$4.5 million outstanding**), all in compliance with covenants[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - The **$8.4 million PPP Loan** was received on April 20, 2020, to support employment and payroll, with a significant portion expected to be forgiven[127](index=127&type=chunk)[129](index=129&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) - As of June 30, 2020, the company had no material off-balance sheet arrangements[134](index=134&type=chunk) [Non-GAAP Financial Measures](index=36&type=section&id=Non-GAAP%20Financial%20Measures) - Adjusted EBITDA is defined as net income plus net interest expense, stock-based compensation, depreciation and amortization expenses, and any transaction-related costs, used to evaluate operating performance[136](index=136&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $2,652 | $10,613 | $4,614 | $17,496 | | Depreciation and amortization | $5,341 | $4,822 | $10,343 | $8,938 | | Interest expense, net | $293 | $302 | $572 | $609 | | Income taxes | $1,260 | $2,168 | $1,370 | $3,525 | | EBITDA | $9,546 | $17,905 | $16,899 | $30,568 | | Stock-based compensation | $1,106 | $1,060 | $2,029 | $1,954 | | Accretion of asset retirement obligation | $159 | $128 | $300 | $256 | | Adjusted EBITDA | $10,811 | $19,093 | $19,228 | $32,778 | - Non-GAAP revenue per ton (FOB mine) and cash cost per ton sold are presented to allow comparison with other coal companies and monitor coal price/cost changes excluding transportation costs[138](index=138&type=chunk)[140](index=140&type=chunk) Non-GAAP Revenue per Ton Sold (FOB mine) (in thousands, except per ton amounts) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $36,374 | $65,761 | $78,310 | $123,221 | | Less: Transportation costs | $(3,454) | $(4,737) | $(6,560) | $(12,087) | | Non-GAAP revenue (FOB mine) | $32,920 | $61,024 | $71,750 | $111,134 | | Tons sold | 362 | 525 | 778 | 1,003 | | Revenue per ton sold (FOB mine) | $91 | $116 | $92 | $111 | Non-GAAP Cash Cost per Ton Sold (FOB mine) (in thousands, except per ton amounts) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of sales | $30,134 | $43,219 | $61,069 | $84,225 | | Less: Transportation costs | $(3,181) | $(4,737) | $(6,307) | $(12,019) | | Non-GAAP cash cost of sales | $26,953 | $38,482 | $54,762 | $72,206 | | Tons sold | 362 | 525 | 778 | 1,003 | | Cash cost per ton sold | $74 | $73 | $70 | $72 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the company's Annual Report on Form 10-K for detailed quantitative and qualitative disclosures regarding market risk - Quantitative and qualitative disclosures about market risk are included in Item 7A of the Annual Report on Form 10-K for the year ended December 31, 2019[142](index=142&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the effectiveness of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Disclosure Controls and Procedures](index=38&type=section&id=Disclosure%20Controls%20and%20Procedures) - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2020, at a reasonable assurance level[143](index=143&type=chunk)[144](index=144&type=chunk) [Changes in Internal Control over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no significant changes in the company's internal control over financial reporting during the quarter ended June 30, 2020, that materially affected or are reasonably likely to materially affect it[146](index=146&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is involved in routine litigation but does not expect any material adverse effects on its financial condition, cash flows, or results of operations - The company may be subject to routine litigation, but management believes no pending matters will have a material adverse effect on financial condition, cash flows, or results of operations[149](index=149&type=chunk) [Item 1A. Risk Factors](index=41&type=page&id=Item%201A.%20Risk%20Factors) This section updates the risk factors, primarily focusing on the adverse impacts of the COVID-19 pandemic on business operations, customer demand, and financial condition, as well as risks associated with customer concentration and potential challenges to the company's Paycheck Protection Program loan eligibility - The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption, leading to a slowdown in the global economy, declines in metallurgical coal prices, and reduced demand for steel[152](index=152&type=chunk)[153](index=153&type=chunk) - Company actions in response to COVID-19 include employee furloughs, executive salary reductions, partial mine closure, and capital expenditure deferrals[154](index=154&type=chunk) - Two customers have declared material adverse change or force majeure, reducing or delaying planned metallurgical coal purchases by **up to 12%** of total contracted sales volumes for 2020[156](index=156&type=chunk) - The company has **two customers accounting for approximately 50% of total revenue** for the six months ended June 30, 2020, posing a risk if purchases are significantly reduced[159](index=159&type=chunk)[161](index=161&type=chunk) - There is a risk that the federal government or private plaintiffs may challenge the company's eligibility for the **$8.4 million PPP Loan**, potentially leading to civil and criminal penalties if certifications are deemed not in good faith[162](index=162&type=chunk)[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that information regarding mine safety violations and other regulatory matters is provided in Exhibit 95.1 of this Quarterly Report - Mine safety disclosures are included in **Exhibit 95.1** to this Quarterly Report[166](index=166&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished with the Quarterly Report, including certifications, mine safety disclosures, and XBRL documents - The report includes certifications from the CEO and CFO (Sections **302** and **906** of Sarbanes-Oxley Act), Mine Safety Disclosure (**Exhibit 95.1**), and various XBRL taxonomy documents[168](index=168&type=chunk) [SIGNATURES](index=47&type=section&id=SIGNATURES) - The report is signed by Michael D. Bauersachs, President and Chief Executive Officer, and Jeremy R. Sussman, Chief Financial Officer, on **August 6, 2020**[173](index=173&type=chunk)

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) Details the company's Q1 2020 Form 10-Q filing, registrant status, and outstanding common stock - Ramaco Resources, Inc. filed its Form 10-Q for the quarterly period ended March 31, 2020[2](index=2&type=chunk) - As of May 12, 2020, the registrant had **42,713,347 shares** of common stock outstanding[4](index=4&type=chunk) Registrant Status | Status | Indication | | :-------------------- | :--------- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☐ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Outlines the inherent risks and uncertainties associated with the report's forward-looking statements - The report includes forward-looking statements based on management's current expectations and assumptions, which are subject to various risks and uncertainties[9](index=9&type=chunk) - Key risks include the impact of the **COVID-19 global pandemic**, anticipated production levels, economic conditions in the metallurgical coal and steel industries, and the ability to obtain additional financing[10](index=10&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements as **actual results could differ materially and adversely**[11](index=11&type=chunk) [PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the company's Q1 2020 unaudited financial statements, management analysis, and risk disclosures [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) Provides unaudited condensed consolidated financial statements and accompanying notes for Q1 2020 [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Summarizes the company's assets, liabilities, and stockholders' equity as of March 31, 2020 Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2020 | December 31, 2019 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Cash and cash equivalents | $15,319 | $5,532 | +$9,787 | | Total current assets | $58,140 | $44,323 | +$13,817 | | Property, plant and equipment – net | $181,896 | $178,202 | +$3,694 | | Total Assets | $244,659 | $226,813 | +$17,846 | | Total current liabilities | $28,652 | $26,411 | +$2,241 | | Long-term debt, net | $22,295 | $9,614 | +$12,681 | | Total liabilities | $71,691 | $56,730 | +$14,961 | | Total stockholders' equity | $172,968 | $170,083 | +$2,885 | [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income for the first quarter of 2020 Condensed Consolidated Statements of Operations Highlights (Three months ended March 31, in thousands) | Metric | 2020 | 2019 | Change (YoY) | | :---------------------------------- | :---------- | :---------- | :----------- | | Revenue | $41,935 | $57,460 | -$15,525 (-27.0%) | | Total costs and expenses | $40,794 | $49,210 | -$8,416 (-17.1%) | | Operating income | $1,141 | $8,250 | -$7,109 (-86.2%) | | Income before tax | $2,072 | $8,241 | -$6,169 (-74.9%) | | Net income | $1,962 | $6,883 | -$4,921 (-71.5%) | | Basic Earnings per common share | $0.05 | $0.17 | -$0.12 (-70.6%) | | Diluted Earnings per common share | $0.05 | $0.17 | -$0.12 (-70.6%) | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines the changes in the company's equity accounts during the first quarter of 2020 Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | Balance at Jan 1, 2020 | Stock-based compensation | Net income | Balance at Mar 31, 2020 | | :-------------------- | :--------------------- | :----------------------- | :--------- | :---------------------- | | Common Stock | $410 | $17 | — | $427 | | Additional Paid-in Capital | $154,957 | $906 | — | $155,863 | | Retained Earnings | $14,716 | — | $1,962 | $16,678 | | Total Stockholders' Equity | $170,083 | $923 | $1,962 | $172,968 | Stockholders' Equity Changes (Three months ended March 31, in thousands) | Metric | 2020 | 2019 | | :-------------------- | :---------- | :---------- | | Stock-based compensation | $923 | $894 | | Net income | $1,962 | $6,883 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for Q1 2020 - Net cash from operating activities significantly improved in Q1 2020, primarily due to a positive change in accounts receivable of **$4.8 million**, compared to a negative change of **$16.6 million** in Q1 2019[22](index=22&type=chunk) Condensed Consolidated Statements of Cash Flows Highlights (Three months ended March 31, in thousands) | Metric | 2020 | 2019 | Change (YoY) | | :---------------------------------- | :---------- | :---------- | :----------- | | Net cash from operating activities | $6,416 | $(6,077) | +$12,493 | | Purchases of property, plant and equipment | $(8,900) | $(8,199) | -$701 | | Net cash from financing activities | $12,386 | $9,078 | +$3,308 | | Net change in cash and cash equivalents and restricted cash | $9,902 | $(5,198) | +$15,100 | | Cash and cash equivalents and restricted cash, end of period | $16,767 | $2,182 | +$14,585 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of the company's business, accounting policies, and specific financial items [NOTE 1—DESCRIPTION OF BUSINESS](index=11&type=section&id=NOTE%201—DESCRIPTION%20OF%20BUSINESS) Describes the company's corporate structure and its focus on metallurgical coal operations - Ramaco Resources, Inc. is a Delaware corporation, formed in October 2016, operating and developing high-quality, low-cost metallurgical coal[24](index=24&type=chunk) - The company's principal corporate offices are located in Lexington, Kentucky[24](index=24&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202—SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Details the accounting principles and policies applied in the preparation of the financial statements - Interim financial statements are unaudited and prepared under SEC rules, with certain disclosures condensed or omitted compared to full GAAP statements[25](index=25&type=chunk) - The company is self-insured for workers' compensation claims, with an estimated aggregate liability of **$1.2 million** at March 31, 2020[28](index=28&type=chunk) - Sales to three customers accounted for approximately **73% of total revenue** for the three months ended March 31, 2020, indicating significant customer concentration[31](index=31&type=chunk) [NOTE 3—PROPERTY, PLANT AND EQUIPMENT](index=12&type=section&id=NOTE%203—PROPERTY,%20PLANT%20AND%20EQUIPMENT) Presents the composition of and changes in the company's fixed assets and related depreciation Property, Plant and Equipment, Net (in thousands) | Category | March 31, 2020 | December 31, 2019 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Plant and equipment | $145,347 | $142,773 | +$2,574 | | Construction in process | $14,144 | $11,986 | +$2,158 | | Capitalized mine development cost | $62,737 | $58,773 | +$3,964 | | Less: accumulated depreciation and amortization | $(40,332) | $(35,330) | -$5,002 | | Total property, plant and equipment, net | $181,896 | $178,202 | +$3,694 | Depreciation and Amortization (Three months ended March 31, in thousands) | Category | 2020 | 2019 | Change (YoY) | | :---------------------------------- | :---------- | :---------- | :----------- | | Depreciation of plant and equipment | $4,175 | $3,019 | +$1,156 (+38.3%) | | Amortization of capitalized mine development costs | $827 | $1,097 | -$270 (-24.6%) | | Total depreciation and amortization | $5,002 | $4,116 | +$886 (+21.5%) | [NOTE 4—DEBT](index=12&type=section&id=NOTE%204—DEBT) Details the company's credit facilities, outstanding debt balances, and covenant compliance - The Revolving Credit Facility, amended on February 20, 2020, consists of a **$10.0 million** term loan and up to **$30.0 million** revolving line of credit[37](index=37&type=chunk) - The company was in compliance with all debt covenants as of March 31, 2020[41](index=41&type=chunk) Debt Balances and Availability (as of March 31, 2020, in millions) | Debt Instrument | Outstanding Balance | Remaining Availability | | :---------------------- | :------------------ | :--------------------- | | Revolving Credit Facility | $16.5 | $13.5 | | Term Loan | $9.1 | N/A | [NOTE 5—EQUITY](index=14&type=section&id=NOTE%205—EQUITY) Discloses information on stock-based compensation plans, restricted stock activity, and unrecognized costs - As of March 31, 2020, **3.3 million shares** were available under the stock-based compensation plan for future awards[42](index=42&type=chunk) - There was **$8.8 million** of total unrecognized compensation cost related to unvested restricted stock, to be recognized over a weighted-average period of 2.3 years[44](index=44&type=chunk) Restricted Stock Activity (in thousands, except per share amounts) | Metric | Shares | Weighted Average Grant Date Fair Value | | :------------------------ | :---------- | :------------------------------------- | | Outstanding at Dec 31, 2019 | 1,628,241 | $6.32 | | Granted | 1,714,152 | $3.06 | | Outstanding at Mar 31, 2020 | 3,342,393 | $4.65 | [NOTE 6—COMMITMENTS AND CONTINGENCIES](index=14&type=section&id=NOTE%206—COMMITMENTS%20AND%20CONTINGENCIES) Outlines the company's financial commitments, bonding requirements, and ongoing litigation - Total reclamation bonding requirements were **$13.3 million** as of March 31, 2020, supported by surety bonds[46](index=46&type=chunk) - Commitments under take-or-pay arrangements for coal transportation totaled **$5.1 million** through March 31, 2021[47](index=47&type=chunk) - The company is in litigation regarding a partial structural failure at its Elk Creek plant in November 2018, with a trial scheduled for December 8, 2020[49](index=49&type=chunk) [NOTE 7—REVENUE](index=16&type=section&id=NOTE%207—REVENUE) Provides a breakdown of coal sales revenue by domestic and export markets - Two customers accounted for approximately **56% of total revenue** during Q1 2020, and their contractual obligations may be delayed or curtailed due to COVID-19[57](index=57&type=chunk) Coal Sales Revenue (Three months ended March 31, in thousands) | Category | 2020 | 2019 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Domestic revenues | $30,532 | $36,571 | -$6,039 (-16.5%) | | Export revenues | $11,403 | $20,889 | -$9,486 (-45.4%) | | Total revenues | $41,935 | $57,460 | -$15,525 (-27.0%) | [NOTE 8—INCOME TAXES](index=16&type=section&id=NOTE%208—INCOME%20TAXES) Explains the company's effective tax rate and the factors contributing to its change year-over-year - The lower effective tax rate in Q1 2020 (**5% vs. 16%** in Q1 2019) is primarily due to state taxes, permanent differences for non-deductible expenses, and depletion expense differences[52](index=52&type=chunk) Effective Tax Rate (Three months ended March 31) | Period | Effective Tax Rate | | :-------------------- | :----------------- | | March 31, 2020 | 5% | | March 31, 2019 | 16% | [NOTE 9—EARNINGS PER SHARE](index=17&type=section&id=NOTE%209—EARNINGS%20PER%20SHARE) Presents the calculation of basic and diluted earnings per share for the first quarter - Diluted EPS for Q1 2020 excludes **937,424 anti-dilutive stock options**[53](index=53&type=chunk) Earnings Per Share (Three months ended March 31, in thousands, except per share amounts) | Metric | 2020 | 2019 | Change (YoY) | | :---------------------------------- | :---------- | :---------- | :----------- | | Net income | $1,962 | $6,883 | -$4,921 (-71.5%) | | Weighted average shares used to compute basic EPS | 41,760 | 40,604 | +1,156 (+2.8%) | | Basic EPS | $0.05 | $0.17 | -$0.12 (-70.6%) | | Diluted EPS | $0.05 | $0.17 | -$0.12 (-70.6%) | [NOTE 10—RELATED PARTY TRANSACTIONS](index=17&type=section&id=NOTE%2010—RELATED%20PARTY%20TRANSACTIONS) Discloses transactions and agreements with related parties, including royalty payments - The company has mineral lease and surface rights agreements with Ramaco Coal, LLC, a related party[54](index=54&type=chunk) Related Party Royalties (in thousands) | Metric | March 31, 2020 | December 31, 2019 | | :-------------------- | :------------- | :---------------- | | Production royalty payables | $400 | $500 | | Metric | Three months ended March 31, 2020 | Three months ended March 31, 2019 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Royalties paid | $1,200 | $1,300 | [NOTE 11—SUBSEQUENT EVENTS](index=17&type=section&id=NOTE%2011—SUBSEQUENT%20EVENTS) Details significant events after the reporting period, including COVID-19 impacts and financing activities - The COVID-19 pandemic led to declining demand and spot price reductions for metallurgical coal, limiting spot sales and increasing inventories in Q1 2020[56](index=56&type=chunk) - Two major customers (**56% of Q1 2020 revenue**) notified the company of potential delays or curtailments in contractual purchases due to COVID-19[57](index=57&type=chunk) - In response, the company implemented a two-week operational furlough for 182 employees at Elk Creek (recalled by May 1, 2020), temporarily reduced executive salaries by **30%**, and deferred non-essential capital expenditures[58](index=58&type=chunk)[61](index=61&type=chunk)[67](index=67&type=chunk) - On April 20, 2020, the company received an **$8.4 million** Paycheck Protection Program (PPP) Loan to retain employees and cover payroll, lease, and utility payments[63](index=63&type=chunk) - On April 16, 2020, the company secured a **$4.7 million** equipment loan for financing existing equipment and anticipated future capital expenditures[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's analysis of Q1 2020 financial performance, liquidity, and the impact of COVID-19 [Overview](index=21&type=section&id=Overview) Presents the company's business focus, reserve base, and production goals amid challenging market conditions - Ramaco Resources, Inc. is a metallurgical coal operator and developer with a **265-million-ton reserve base** as of December 31, 2019[69](index=69&type=chunk) - The company aims to grow production to more than **4-4.5 million clean tons** of metallurgical coal, subject to market conditions[69](index=69&type=chunk) - Q1 2020 results were negatively impacted by continued weakness in the metallurgical industry and the emerging COVID-19 outbreak[71](index=71&type=chunk) [Impact of the Coronavirus Disease 2019 (COVID-19) Pandemic on Our Business](index=21&type=section&id=Impact%20of%20the%20Coronavirus%20Disease%202019%20(COVID-19)%20Pandemic%20on%20Our%20Business) Details the adverse effects of the COVID-19 pandemic on demand, pricing, and company operations - The COVID-19 pandemic led to declining demand and spot price reductions for metallurgical coal, resulting in increased inventories in Q1 2020[73](index=73&type=chunk) - Two major customers (**56% of Q1 2020 revenue**) notified the company of potential delays or curtailments in contractual purchases due to COVID-19[74](index=74&type=chunk) - In response, the company implemented operational furloughs, executive salary reductions, and deferred non-essential capital expenditures[75](index=75&type=chunk)[78](index=78&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Compares Q1 2020 financial results to Q1 2019, highlighting key performance drivers - Net income and Adjusted EBITDA significantly decreased in Q1 2020 compared to Q1 2019, primarily due to lower realized pricing and sales volumes, partially offset by improved cash cost of sales[79](index=79&type=chunk) Consolidated Statement of Operations Data (Three months ended March 31, in thousands) | Metric | 2020 | 2019 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Revenue | $41,935 | $57,460 | -$15,525 (-27.0%) | | Operating income | $1,141 | $8,250 | -$7,109 (-86.2%) | | Net income | $1,962 | $6,883 | -$4,921 (-71.5%) | | Adjusted EBITDA | $8,417 | $13,686 | -$5,269 (-38.5%) | [Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019](index=25&type=section&id=Three%20Months%20Ended%20March%2031,%202020%20Compared%20to%20Three%20Months%20Ended%20March%2031,%202019) Provides a detailed comparative analysis of coal sales, costs, and expenses for Q1 2020 versus Q1 2019 - The decline in sales volumes and realized pricing in 2020 is primarily due to reduced worldwide demand, exacerbated by the COVID-19 pandemic[82](index=82&type=chunk) Coal Sales Performance (Three months ended March 31, in thousands, except tons) | Metric | 2020 | 2019 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Company Produced Coal sales revenue | $41,935 | $52,700 | -$10,765 (-20.4%) | | Company Produced Tons sold | 416 | 443 | -27 (-6.1%) | | Purchased from Third Parties Coal sales revenue | $0 | $4,760 | -$4,760 (-100%) | | Purchased from Third Parties Tons sold | 0 | 35 | -35 (-100%) | | Overall Revenue per ton sold (FOB mine) | $93 | $105 | -$12 (-11.4%) | Cost of Sales and Expenses (Three months ended March 31, in thousands) | Metric | 2020 | 2019 | Change (YoY) | | :-------------------- | :---------- | :---------- | :----------- | | Cost of sales | $30,934 | $41,006 | -$10,072 (-24.6%) | | Cash cost per ton sold (FOB mine) | $67 | $68 | -$1 (-1.5%) | | Depreciation and amortization | $5,002 | $4,116 | +$886 (+21.5%) | | Selling, general and administrative | $4,717 | $3,960 | +$757 (+19.1%) | | Other income | $1,210 | $298 | +$912 (+306.0%) | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's liquidity position, cash flow activities, and capital management strategies - The company believes current cash, operating cash flow, and available credit will meet future capital and liquidity requirements, but is reviewing further capital expenditure reductions and alternative financing due to COVID-19 uncertainty[91](index=91&type=chunk)[93](index=93&type=chunk) Liquidity Position (as of March 31, 2020, in millions) | Metric | Amount | | :-------------------- | :----- | | Cash and cash equivalents | $15.3 | | Available under credit agreements | $13.5 | Cash Flow Activities (Three months ended March 31, 2020, in millions) | Activity | Amount | | :-------------------- | :----- | | Cash flows from operating activities | $6.4 | | Net borrowings | $12.4 | | Capital expenditures | $(8.9) | [Indebtedness](index=27&type=section&id=Indebtedness) Details the terms of the company's credit facilities and recent loan agreements - The Revolving Credit Facility (amended Feb 2020) includes a **$10.0 million** term loan and up to **$30.0 million** revolving line of credit, secured by personal property assets[94](index=94&type=chunk) - On April 20, 2020, the company received an **$8.4 million PPP Loan** to retain employees and cover payroll, lease, and utility payments[98](index=98&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) - An additional **$4.7 million equipment loan** was secured on April 16, 2020, for general corporate purposes and future capital expenditures[101](index=101&type=chunk) Debt Outstanding (as of March 31, 2020, in millions) | Debt Instrument | Outstanding Balance | | :---------------------- | :------------------ | | Revolving Credit Facility | $16.5 | | Term Loan | $9.1 | [Off-Balance Sheet Arrangements](index=29&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of material off-balance sheet arrangements as of the reporting date - As of March 31, 2020, the company had no material off-balance sheet arrangements[102](index=102&type=chunk) [Non-GAAP Financial Measures](index=29&type=section&id=Non-GAAP%20Financial%20Measures) Defines and reconciles non-GAAP measures like Adjusted EBITDA and cash cost per ton to their GAAP equivalents - Adjusted EBITDA is defined as net income plus net interest expense, stock-based compensation, depreciation and amortization expenses, and any transaction-related costs[104](index=104&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (Three months ended March 31, in thousands) | Metric | 2020 | 2019 | | :-------------------- | :---------- | :---------- | | Net income | $1,962 | $6,883 | | Depreciation and amortization | $5,002 | $4,116 | | Interest expense, net | $279 | $307 | | Income taxes | $110 | $1,358 | | EBITDA | $7,353 | $12,664 | | Stock-based compensation | $923 | $894 | | Accretion of asset retirement obligation | $141 | $128 | | Adjusted EBITDA | $8,417 | $13,686 | Non-GAAP Revenue and Cash Cost per Ton Sold (Three months ended March 31, in thousands, except per ton amounts) | Metric | 2020 (Total) | 2019 (Total) | | :-------------------- | :----------- | :----------- | | Non-GAAP revenue (FOB mine) | $38,749 | $50,110 | | Tons sold | 416 | 478 | | Revenue per ton sold (FOB mine) | $93 | $105 | | Non-GAAP cash cost of sales | $27,748 | $33,724 | | Cash cost per ton sold | $67 | $71 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Refers to the company's Annual Report on Form 10-K for detailed market risk disclosures - Quantitative and qualitative disclosures about market risk are included in Item 7A of the Annual Report on Form 10-K for the year ended December 31, 2019[110](index=110&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and the status of internal financial reporting controls [Disclosure Controls and Procedures](index=30&type=section&id=Disclosure%20Controls%20and%20Procedures) States management's conclusion on the effectiveness of the company's disclosure controls - Management concluded that disclosure controls and procedures were effective as of March 31, 2020, at the reasonable assurance level[112](index=112&type=chunk) [Changes in Internal Control over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports on any significant changes to internal controls over financial reporting during the quarter - There were no significant changes in the system of internal control over financial reporting during the quarter ended March 31, 2020[114](index=114&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) Provides additional non-financial information on legal proceedings, risk factors, and mine safety [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) Discloses the status of litigation and its potential impact on the company's financial condition - Management believes no pending litigation, disputes, or claims will have a material adverse effect on the company's financial condition, cash flows, or results of operations[117](index=117&type=chunk) - For a description of legal proceedings, refer to Note 6 to the Condensed Consolidated Financial Statements[117](index=117&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, emphasizing the adverse impacts of the COVID-19 pandemic on the business - The COVID-19 pandemic is adversely affecting the business, operations, and financial condition, causing a significant slowdown in the global economy and declines in metallurgical coal prices and demand for steel[120](index=120&type=chunk) - Customer concentration is a significant risk, with two of the three largest customers (**56% of Q1 2020 revenue**) notifying the company of potential delays or curtailments due to COVID-19[121](index=121&type=chunk)[127](index=127&type=chunk) - The company's **$8.4 million Paycheck Protection Program (PPP) Loan** may be challenged regarding eligibility, potentially leading to significant legal fees and civil/criminal penalties[129](index=129&type=chunk)[131](index=131&type=chunk) - The full impact of COVID-19 on the business, cash flows, liquidity, financial condition, and results of operations remains uncertain[125](index=125&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Refers to an exhibit for detailed information on mine safety violations and regulatory matters - Information concerning mine safety violations or other regulatory matters is included in Exhibit 95.1 to this Quarterly Report[132](index=132&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including agreements, certifications, and disclosures - Exhibits include promissory notes for the PPP Loan and an equipment loan, restricted stock award agreements, and amendments to the Credit and Security Agreement[134](index=134&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act) and Mine Safety Disclosure are filed or furnished[134](index=134&type=chunk) [SIGNATURES](index=40&type=section&id=SIGNATURES) Contains the official signatures of the company's certifying officers for the report - The report was signed on May 12, 2020, by Michael D. Bauersachs (President and Chief Executive Officer) and Jeremy R. Sussman (Chief Financial Officer)[139](index=139&type=chunk)

Part I [Business](index=4&type=section&id=Item%201.%20Business) Ramaco Resources is a pure-play metallurgical coal producer with 242 million tons of reserves, focusing on low-cost production for North American and international steel markets, operating under extensive regulations - Ramaco is a pure-play metallurgical coal company with **242 million tons** of high-quality metallurgical coal reserves across four properties: Elk Creek, Berwind, RAM Mine, and Knox Creek[16](index=16&type=chunk) - The company's strategy focuses on developing its properties to reach **4-4.5 million clean tons of production by 2023**, maintaining a low-cost production profile, and upholding a conservative capital structure[21](index=21&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) 2019 Sales and Customer Concentration | Metric | Value | | :--- | :--- | | Total Tons Sold (2019) | 1.95 million tons | | Sales to North American Markets | 75% | | Sales to Export Markets | 25% | | Revenue from Top 2 Customers | ~42% of total revenue | - The company's operations are subject to extensive federal, state, and local regulations governing environmental protection (SMCRA, CWA, CAA), mine safety (MSHA), and other areas, which involve significant compliance costs and permitting requirements[62](index=62&type=chunk)[63](index=63&type=chunk)[65](index=65&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, regulatory, and corporate risks, including development delays, steel industry dependence, price volatility, environmental compliance, and control by significant stockholders - Business risks include incomplete property development, high dependency on the steel industry, volatile metallurgical coal prices, and operational hazards such as the **2018 silo failure** at the Elk Creek plant[119](index=119&type=chunk)[122](index=122&type=chunk)[147](index=147&type=chunk) - The company's customer base is highly dependent on the steel industry, with a novel coronavirus outbreak noted as a potential risk that could reduce demand for metallurgical coal[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - Extensive environmental regulations, particularly those related to greenhouse gas emissions, water discharge (CWA), and air quality (CAA), could increase operating costs, reduce coal demand, and restrict operations[193](index=193&type=chunk)[195](index=195&type=chunk)[207](index=207&type=chunk) - Significant stockholders (Yorktown and ECP) collectively own approximately **64% of common stock**, giving them control over stockholder approvals, and the company is a "controlled company" under NASDAQ rules[229](index=229&type=chunk)[244](index=244&type=chunk) [Unresolved Staff Comments](index=76&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[245](index=245&type=chunk) [Properties](index=76&type=section&id=Item%202.%20Properties) As of December 31, 2019, Ramaco controlled approximately 114,662 acres with **242 million tons** of primarily metallurgical coal reserves, verified by independent firms - At December 31, 2019, the company owned or controlled approximately **113,095 acres** of coal minerals in Virginia and West Virginia and **1,567 acres** in Pennsylvania[246](index=246&type=chunk) Coal Reserves by Project (as of Dec 31, 2019) | Project | Location | Mining Method | Proven (M tons) | Probable (M tons) | Total (M tons) | Status | Typical Met Coal Quality | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Elk Creek | WV | Underground, Highwall, Surface | 55 | 37 | 93 | Producing | High Volatile A, A/B, B | | Berwind | WV, VA | Underground | 30 | 19 | 50 | Producing | Low Volatile | | RAM Mine | PA | Underground | 2 | 3 | 5 | 2022 | High Volatile C | | Knox Creek | VA | Highwall, Underground | 81 | 14 | 94 | Producing | High Volatile A | | **Total** | | | **168** | **74** | **242** | | | - Economic recoverability of reserves was assessed using a three-year average historical benchmark price of approximately **$88/short ton** for semi-soft coking coal and **$104/short ton** for premium hard coking coal[255](index=255&type=chunk)[257](index=257&type=chunk) [Legal Proceedings](index=81&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine litigation, including a lawsuit against its insurer for a 2018 silo collapse, but expects no material adverse effects - The company is involved in routine litigation but does not expect any material adverse effects from pending cases[259](index=259&type=chunk) - The company filed a lawsuit against its insurer, Federal Insurance Company, seeking a declaratory judgment for coverage of a partial silo collapse that occurred on **November 5, 2018**[39](index=39&type=chunk)[428](index=428&type=chunk) [Mine Safety Disclosures](index=81&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures, as required by the Dodd-Frank Act, are included in Exhibit 95.1 of this annual report - Mine safety disclosures required by Section 1503(a) of the Dodd-Frank Act are included in Exhibit 95.1 to this annual report[260](index=260&type=chunk) Part II [Market for Registrant's Common Equity and Related Shareholder Matters](index=82&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%20and%20Related%20Shareholder%20Matters) The company's common stock trades on NASDAQ under "METC", with **37 holders of record** as of February 20, 2020, and no cash dividends have been paid - Common stock is listed on the NASDAQ Global Select Market under the symbol **"METC"**[263](index=263&type=chunk) - As of **February 20, 2020**, there were **37 holders of record**[263](index=263&type=chunk) - The company has never declared or paid cash dividends on its common stock[264](index=264&type=chunk) [Selected Financial Data](index=82&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected historical financial data from 2015-2019 shows significant revenue growth to **$230.2 million** and net income of **$24.9 million** in 2019, with total assets reaching **$226.8 million** Selected Historical Financial Data (In thousands) | | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Income Statement Data:** | | | | | | | Revenue | $230,213 | $227,574 | $61,036 | $5,216 | $— | | Operating income (loss) | $29,532 | $24,096 | $(15,893) | $(7,530) | $(2,333) | | Net income (loss) | $24,934 | $25,074 | $(15,417) | $(7,515) | $(2,335) | | **Balance Sheet Data:** | | | | | | | Total Assets | $226,813 | $188,244 | $148,098 | $119,209 | $20,352 | | Total stockholders' equity | $170,083 | $141,109 | $113,397 | $83,788 | $6,660 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=84&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2019, revenue was **$230.2 million** with **$24.9 million** net income, **Adjusted EBITDA grew 31%** to **$55.4 million**, and **2020 sales contracts secured for 1.5 million tons** at **$93.29/ton** 2019 vs 2018 Performance Highlights (In thousands, except per ton data) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | $230,213 | $227,574 | | Net Income | $24,934 | $25,074 | | Adjusted EBITDA | $55,382 | $42,169 | | Total Tons Sold | 1,950 | 2,148 | | Company Produced Tons Sold | 1,872 | 1,721 | | Avg. Realized Price/Ton (Company Produced) | $109 | $92 | | Cash Cost/Ton (Company Produced) | $73 | $63 | - Metallurgical coal markets weakened in 2019 due to Chinese import restrictions and global economic concerns, with the emerging coronavirus outbreak noted as a new uncertainty for **2020 demand**[272](index=272&type=chunk)[273](index=273&type=chunk) - As of December 31, 2019, the company had fixed-price forward sales contracts for **1.5 million tons** of metallurgical coal for **2020** at an average price of **$93.29/ton FOB mine**[298](index=298&type=chunk) - Total liquidity as of December 31, 2019 was **$21.8 million**, consisting of cash and availability under its Revolving Credit Facility, with capital expenditures for **2020** anticipated to be between **$25 million and $30 million**[308](index=308&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=95&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is metallurgical coal price volatility, managed by cost control, with limited interest rate risk and indirect foreign exchange exposure - The company's primary market risk is from the volatility of metallurgical coal prices, which it manages by controlling mining costs rather than using derivatives[326](index=326&type=chunk) - Interest rate risk is considered low due to the company's limited debt position[327](index=327&type=chunk) - Foreign exchange risk is indirect; although sales are denominated in U.S. dollars, a stronger dollar can make the company's coal less competitive against non-U.S. suppliers[328](index=328&type=chunk) [Financial Statements and Supplementary Data](index=96&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2017-2019, detailing financial position, operations, and cash flows, with **2019 total assets of $226.8 million** and **net income of $24.9 million** Consolidated Balance Sheet Highlights (In thousands) | | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total Current Assets | $44,323 | $35,019 | | Property, Plant and Equipment, net | $178,202 | $149,205 | | **Total Assets** | **$226,813** | **$188,244** | | Total Current Liabilities | $26,411 | $29,845 | | Total Liabilities | $56,730 | $47,135 | | **Total Stockholders' Equity** | **$170,083** | **$141,109** | Consolidated Income Statement Highlights (In thousands) | | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Revenue | $230,213 | $227,574 | $61,036 | | Operating Income (Loss) | $29,532 | $24,096 | $(15,893) | | **Net Income (Loss)** | **$24,934** | **$25,074** | **$(15,417)** | - In 2019, sales to two customers accounted for approximately **42% of total revenue**, with their outstanding balance representing **58% of total accounts receivable** at year-end[388](index=388&type=chunk) - The company leases most of its coal reserves from Ramaco Coal, LLC, a related party, with royalty payments to this affiliate totaling **$9.0 million** in 2019[430](index=430&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=122&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles, practices, or financial disclosure - None[446](index=446&type=chunk) [Controls and Procedures](index=122&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of **December 31, 2019**[447](index=447&type=chunk) - Management's assessment concluded that internal control over financial reporting was effective as of **December 31, 2019**[448](index=448&type=chunk) [Other Information](index=122&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[451](index=451&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=123&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the **2020 Proxy Statement** - Information is incorporated by reference from the **2020 Proxy Statement**[454](index=454&type=chunk) [Executive Compensation](index=123&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the **2020 Proxy Statement** - Information is incorporated by reference from the **2020 Proxy Statement**[455](index=455&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=123&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of beneficial owners and management is incorporated by reference from the **2020 Proxy Statement** - Information is incorporated by reference from the **2020 Proxy Statement**[456](index=456&type=chunk) [Certain Relationships and Related Persons Transactions](index=123&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Persons%20Transactions) Information concerning certain relationships and related person transactions is incorporated by reference from the **2020 Proxy Statement** - Information is incorporated by reference from the **2020 Proxy Statement**[457](index=457&type=chunk) [Principal Accountant Fees and Services](index=123&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the **2020 Proxy Statement** - Information is incorporated by reference from the **2020 Proxy Statement**[458](index=458&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=124&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits, including organizational documents, material contracts, incentive plans, and CEO/CFO certifications - The report includes the Consolidated Financial Statements and the Report of Independent Registered Public Accounting Firm[461](index=461&type=chunk) - Key exhibits filed include the Amended and Restated Certificate of Incorporation, various mineral lease agreements with affiliates, credit agreements with KeyBank, and the Long-Term Incentive Plan[461](index=461&type=chunk)[464](index=464&type=chunk)[472](index=472&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act are included as exhibits[472](index=472&type=chunk)