# Ramaco Resources, Inc.: Form 10-Q for the period ended Jun 30, 2023

- Company: [Ramaco Resources, Inc.](/companies/metc.md) (CIK 1687187)
- Form: 10-Q
- Filed: 2023-08-09
- Accepted by EDGAR: Aug 9, 2023, 16:06 ET
- Period: 2023-06-30
- Accession: 0001558370-23-014253
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1687187/000155837023014253/metc-20230630x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1687187/000155837023014253/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-04-01 to 2023-06-30 | $137.5m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 6 months, 2023-01-01 to 2023-06-30 | $303.8m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2023-04-01 to 2023-06-30 | $99.2m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2023-01-01 to 2023-06-30 | $209.7m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2023-04-01 to 2023-06-30 | $14.3m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2023-01-01 to 2023-06-30 | $26.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2023-04-01 to 2023-06-30 | $10.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2023-01-01 to 2023-06-30 | $41.9m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2023-04-01 to 2023-06-30 | $2.5m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2023-01-01 to 2023-06-30 | $8.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-04-01 to 2023-06-30 | $7.6m | us-gaap:NetIncomeLoss |
| Net income | 3 months, 2023-04-01 to 2023-06-20 | $6.1m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-01-01 to 2023-06-30 | $32.8m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-01-01 to 2023-06-20 | $31.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-04-01 to 2023-06-30 | $0.17 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 3 months, 2023-04-01 to 2023-06-20 | $0.14 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-01-01 to 2023-06-30 | $0.73 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-01-01 to 2023-06-20 | $0.70 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-30 | $0.17 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-20 | $0.14 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-01-01 to 2023-06-30 | $0.74 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-01-01 to 2023-06-20 | $0.71 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-04-01 to 2023-06-20 | 44,819,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-01-01 to 2023-06-20 | 44,752,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-01-01 to 2023-06-30 | $49.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2023-01-01 to 2023-06-30 | $48.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2023-01-01 to 2023-06-30 | $11.1m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2023-06-30 | $33.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-06-30 | $177.8m | us-gaap:AssetsCurrent |
| Total assets | at 2023-06-30 | $660.4m | us-gaap:Assets |
| Current liabilities | at 2023-06-30 | $142.1m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-06-30 | $323.3m | us-gaap:Liabilities |
| Long-term debt | at 2023-06-30 | $64.0m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2023-06-30 | $25.3m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2023-06-30 | $337.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 29,552 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report, as well as the financial statements and related notes appearing elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. We caution you that our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences are discussed elsewhere in this Quarterly Report, particularly in the “Cautionary Note Regarding Forward-Looking Statements” and in our Annual Report and in this Quarterly Report under the heading “Item 1A. Risk Factors,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.*

### Overview

We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania. Our executive offices are located in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming. We are a pure play metallurgical coal company with 62 million reserve tons and 1,156 million of measured and indicated resource tons of high-quality metallurgical coal.

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

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

Renewed global economic concerns, including those related to the military conflict involving Russia and Ukraine, have caused volatility in the commodity markets. This volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel products, has had a significant effect on market prices and may affect overall demand for our coal as well as the cost of supplies and equipment.

During the first six months of 2023, we sold 1.5 million tons of coal and recognized $303.8 million of revenue. Of this amount, 31% was sold in North American markets, including Canada, and 69% was sold into export markets. During the same period of 2022, we sold 1.2 million tons of coal and recognized $293.5 million of revenue. Of this amount, 51% of our sales were sold in North American markets, including Canada, with the remaining 49% being sold into the export markets. The increase in sales into export markets, which often include index-based pricing, creates greater potential exposure to variability in pricing in 2023 compared to 2022.

As of June 30, 2023, the Company had outstanding performance obligations of approximately 0.9 million tons for contracts with fixed sales prices averaging $198 per ton, excluding freight, which will generally be satisfied in the second half of 2023, and 0.7 million tons for contracts with index-based pricing mechanisms.

### Recent Developments

The Company continues to assess its potential rare earth elements deposit in Wyoming, and core analysis performed to date shows high relative concentrations of heavy rare earth elements such as Terbium and Dysprosium as well as lighter rare earth elements such as Neodymium and Praseodymium. The exploration target does not represent, and should not be construed to be, a mineral resource or mineral reserve as such terms are used in subpart 1300 of Regulation S-K. The Company also continues its work to advance new carbon product technologies with the goal of commercializing products that use coal in both an improved economic and environmental manner.

On June 21, 2023, the Company distributed Class B common stock, a tracking stock, to provide existing holders of the Company’s common stock an opportunity to participate directly in the financial performance of the Company’s CORE assets on a stand-alone basis, separate from the Company’s metallurgical coal operations. CORE assets were acquired initially by the Company as part of the Company’s acquisition of Ramaco Coal in the second quarter of 2022. The financial performance of CORE assets consists of the following non-cost bearing revenue streams based on the Company’s current expectations:

- Royalty fees derived from the royalties associated with the Ramaco Coal and Amonate reserves, which we believe approximates 3% of Company-produced coal sales revenue excluding coal sales revenue from Knox Creek,
- Infrastructure fees based on $5.00 per ton of coal processed at our preparation plants and $2.50 per ton of loaded coal at the Company’s rail load-out facilities, and
- Future income derived, if and when realized, from advanced carbon products and rare earth elements initiatives.

The Company expects to pay a dividend equal to 20% of the revenues above; however, any dividend amounts declared and paid are subject to the sole discretion of the Company’s Board of Directors. Dividends paid on the tracking stock may create additional value for common stockholders and allow the Company to return to investors a portion of the savings from royalties and infrastructure usage fees resulting from the acquisition of Ramaco Coal. In addition, the tracking stock provides an opportunity for investors to participate directly in the potential revenue growth associated with the development of carbon products and rare earth elements.

Separate financial statements for CORE have not been included as exhibits to this filing since CORE’s financial performance and dividends will be evaluated based on non-cost bearing revenue streams, at least initially, and other potential forms of passive income rather than reduced by allocated costs and expenses. Refer to Note 6 of Part I, Item 1 for additional information related to the tracking stock.

### Results of Operations

*(In thousands, except per share amounts)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ Three months ended June 30, 2023 ​ ​ | ​ ​ | ​ ​ 2022 ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2023 ​ ​ | ​ ​ | ​ ​ 2022 ​ ​ | ​ ​ ​ |
| --- | --- | ---: | --- | --- | --- | --- | --- | --- | --- |
| Revenue | ​ | $137,469 | ​ | $138,655 | ​ | $303,829 | ​ | $293,537 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Costs and expenses | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Cost of sales (exclusive of items shown separately below) | ​ | 99,199 |  | ​ 76,644 |  | ​ 209,748 |  | ​ 157,897 |  |
| Asset retirement obligations accretion | ​ | ​ 349 |  | ​ 755 |  | ​ 700 |  | ​ 990 |  |
| Depreciation, depletion, and amortization | ​ | 13,556 | ​ | ​ 9,783 | ​ | ​ 25,407 | ​ | ​ 18,463 | ​ |
| Selling, general and administrative expenses | ​ | 14,319 | ​ | ​ 8,786 | ​ | ​ 26,061 | ​ | ​ 20,610 | ​ |
| Total costs and expenses | ​ | 127,423 | ​ | ​ 95,968 | ​ | ​ 261,916 | ​ | ​ 197,960 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Operating income | ​ | 10,046 |  | ​ 42,687 |  | ​ 41,913 |  | ​ 95,577 |  |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Other income, net | ​ | 2,495 | ​ | ​ 2,348 | ​ | ​ 3,742 | ​ | ​ 2,714 | ​ |
| Interest expense, net | ​ | (2,518) | ​ | ​ (1,937) | ​ | ​ (4,826) | ​ | ​ (3,068) | ​ |
| Income before tax | ​ | ​ 10,023 | ​ | ​ 43,098 | ​ | ​ 40,829 | ​ | ​ 95,223 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Income tax expense | ​ | 2,467 |  | ​ 9,818 |  | ​ 8,016 |  | ​ 20,472 |  |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Net income | ​ | $7,556 | ​ | $33,280 | ​ | $32,813 | ​ | $74,751 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Earnings per common share | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Basic - Single class (through 6/20/2023) | ​ | $0.14 | ​ | $0.75 | ​ | $0.71 | ​ | $1.69 | ​ |
| Basic - Class A (6/21/2023 - 6/30/2023) | ​ | $0.03 | ​ | $— | ​ | $0.03 | ​ | $— | ​ |
| Total | ​ | $0.17 | ​ | $0.75 | ​ | $0.74 | ​ | $1.69 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Diluted - Single class (through 6/20/23) | ​ | $0.14 | ​ | $0.74 | ​ | $0.70 | ​ | $1.66 | ​ |
| Diluted - Class A (6/21/2023 - 6/30/2023) | ​ | $0.03 | ​ | $— | ​ | $0.03 | ​ | $— | ​ |
| Total | ​ | $0.17 | ​ | $0.74 | ​ | $0.73 | ​ | $1.66 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Adjusted EBITDA | ​ | $30,014 | ​ | $57,859 | ​ | $78,267 | ​ | $121,917 | ​ |

During the three and six months ended June 30, 2023, our net income and Adjusted EBITDA were lower compared to the same periods in 2022, which was largely due to lower margins on coal sales driven by the negative impact of pricing.

#### Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

*Revenue*. Our revenue includes sales of Company produced coal and coal purchased from third parties. We include amounts billed by us for transportation to our customers within revenue and transportation costs incurred within cost of sales.

Coal sales information is summarized as follows:

*(In thousands)*

| ​ ​ Company Produced | ​ ​ | ​ ​ Three months ended June 30, 2023 ​ | ​ | ​ ​ 2022 ​ | ​ | ​ ​ Increase (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Coal sales revenue | ​ | $132,571 | ​ | $137,714 | ​ | $(5,143) |
| Tons sold | ​ | 695 | ​ | 578 | ​ | 117 |
| Purchased from Third Parties | ​ |  | ​ |  | ​ |  |
| Coal sales revenue | ​ | $4,898 | ​ | $941 | ​ | $3,957 |
| Tons sold | ​ | ​ 20 | ​ | 5 | ​ | 15 |
| Totals | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Coal sales revenue | ​ | $137,469 | ​ | $138,655 | ​ | $(1,186) |
| Tons sold | ​ | 715 | ​ | 584 | ​ | 131 |

#### May not foot due to rounding

Coal sales revenue in the second quarter of 2023 was $137.5 million, which decreased 1% compared to the second quarter of 2022, despite the 23% increase in tons sold, due to the negative impact of pricing. Revenue per ton sold decreased 19% from $238 per ton in the second quarter of 2022 to $192 per ton in the second quarter of 2023. Revenue per ton sold (FOB mine), which excludes transportation revenues, decreased 23% from $215 per ton in the second quarter of 2022 to $165 per ton in the second quarter of 2023, including company-produced coal and purchased coal. In addition, index pricing in the third quarter of 2023 to date is down another 10% from the second quarter 2023 average, which will negatively affect future revenue if the market trend continues.

*Cost of sales.* Our cost of sales totaled $99.2 million for the second quarter of 2023 as compared to $76.6 million for the second quarter of 2022. The 29% increase versus the prior year was driven primarily by the increase in tons sold. However, the Company’s cost per ton sold also increased due primarily to inflationary pressure. Total cost per ton sold increased 6% from $131 per ton in the second quarter of 2022 to $139 per ton in the second quarter of 2023. Total cash cost per ton sold *(FOB mine)*, which excludes transportation costs, increased 3% from $108 per ton in the second quarter of 2022 to $111 per ton in the second quarter of 2023, including company-produced coal and purchased coal.

*Depreciation, depletion, and amortization.* Depreciation, depletion, and amortization expense totaled $13.6 million and $9.8 million for the second quarter of 2023 and 2022, respectively. The increase year-to-year occurred across all asset types and was driven by the Company’s initiative to grow production.

*Selling, general, and administrative.* Selling, general, and administrative expenses were $14.3 million and $8.8 million for the three months ended June 30, 2023 and June 30, 2022, respectively. The 63% increase in 2023 was primarily due to increased compensation and benefits on the back of higher headcount as well as increased spending for professional services consistent with the Company’s growth efforts.

*Income tax expense.* The effective tax rate for the second quarter of 2023 and the second quarter of 2022 was 24.6% and 22.8%, respectively. The primary difference from the federal statutory rate of 21% in each period is related to state taxes, non-deductible expenses, the foreign-derived intangible income deduction, and depletion expense for income tax purposes.

#### Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

*Revenue*. Coal sales information is summarized as follows:

*(In thousands)*

| ​ ​ Company Produced | ​ ​ | ​ ​ Six months ended June 30, 2023 ​ | ​ | ​ ​ 2022 ​ | ​ | ​ ​ Increase (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Coal sales revenue | ​ | $291,530 | ​ | $288,643 | ​ | $2,887 |
| Tons sold | ​ | 1,422 | ​ | 1,151 | ​ | 271 |
| Purchased from Third Parties | ​ |  | ​ |  | ​ |  |
| Coal sales revenue | ​ | $12,299 | ​ | $4,894 | ​ | $7,405 |
| Tons sold | ​ | 49 | ​ | 16 | ​ | 33 |
| Totals | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Coal sales revenue | ​ | $303,829 | ​ | $293,537 | ​ | $10,292 |
| Tons sold | ​ | 1,472 | ​ | 1,167 | ​ | 304 |

#### May not foot due to rounding

Coal sales revenue for the six months ended June 30, 2023 was $303.8 million, approximately 4% higher than the same period in 2022 driven by the 26% increase in tons sold offset partially by the negative impact of pricing. Revenue per ton sold decreased 18% from $252 per ton in the first half of 2022 to $206 per ton in the first half of 2023. Revenue per ton sold (FOB mine), which excludes transportation revenues, decreased 22% from $225 per ton in the first half of 2022 to $176 per ton in the first half of 2023, including company-produced coal and purchased coal. In addition, U.S. metallurgical coal spot pricing is down over 20% in the third quarter of 2023 to date from the first half 2023 average, which will negatively affect future revenue if the market trend continues.

*Cost of sales.* Our cost of sales totaled $209.7 million for the first half of 2023 compared to $157.9 million for the same period in 2022. The 33% increase was due largely to the increase in tons sold. However, the Company’s cost per ton sold also increased due primarily to inflationary pressure. Total cost per ton sold increased 5% from $135 per ton in the first half of 2022 to $143 per ton in the first half of 2023. Total cash cost per ton sold *(FOB mine)*, which excludes transportation costs, increased 2% from $109 per ton in the first half of 2022 to $111 per ton in the first half of 2023, including company-produced coal and purchased coal.

*Depreciation, depletion, and amortization.* Depreciation, depletion, and amortization expense totaled $25.4 million and $18.5 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The increase year-to-year occurred across all asset types and was driven by the Company’s initiative to grow production.

*Selling, general, and administrative.* Selling, general, and administrative expenses were $26.1 million and $20.6 million for the six months ended June 30, 2023 and June 30, 2022, respectively. The 26% increase in 2023 was primarily due to increased compensation and benefits on the back of higher headcount as well as increased spending for professional services consistent with the Company’s growth efforts.

*Income tax expense.* The effective tax rate for the six months ended June 30, 2023 and 2022 was 19.6% and 21.5%, respectively. The primary difference from the federal statutory rate of 21% is related to state taxes, non-deductible expenses, the foreign-derived intangible income deduction, and depletion expense for income tax purposes.

### Liquidity and Capital Resources

At June 30, 2023, we had $33.9 million of cash and cash equivalents and $28.9 million available under our Revolving Credit Facility for future borrowings. Starting in the first quarter of 2023, the Company has entered into an arrangement whereby our cash and cash equivalents are placed at various banks in amounts no greater than the $250,000 FDIC-insured limit to help safeguard against potential losses in the financial sector.

#### Significant sources and uses of cash during the first six months of 2023

Sources of cash:

- Cash flows provided by operating activities were $49.6 million and were driven by cash earnings and the increase in accounts payable during 2023 driven by increased spending. These activities were offset partially by the increase in accounts receivable, which was primarily due to the timing of revenues within the second quarter of 2023 and the greater mix of export sales having longer payment terms compared to the fourth quarter of 2022, as well as the increase in inventories, which occurred primarily in raw coal as the volume of production has outpaced sales volume during the year.
- Net borrowings from the Revolving Credit Facility increased by $42.5 million (gross proceeds of $77.5 million less repayments of $35.0 million). The proceeds were used primarily for the management of our normal operating cash position.

Uses of cash:

- Capital expenditures were $48.0 million driven by growth projects
- We made repayments of $20.0 million and $4.8 million against debt incurred from the 2022 acquisitions of Ramaco Coal (a related party) and Maben assets, respectively.
- We paid dividends of $11.1 million. Refer to Note 12 of Part I, Item 1 for information regarding dividends declared after the date of the financial statements.

#### Future sources and uses of cash

Our primary use of cash includes capital expenditures for mine development, ongoing operating expenses, and deferred cash payments in connection with the Ramaco Coal and Maben Coal acquisitions. We expect to fund our capital and liquidity requirements with cash on hand, borrowings under the Revolving Credit Facility, and projected cash flow from operations. Factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program include the following:

- Timely delivery of our product by rail and other transportation carriers;
- Late payments of accounts receivable by our customers;
- Cost overruns in our purchases of equipment needed to complete our mine development plans;
- Delays in completion of development of our various mines, processing plants and refuse disposal facilities, which would reduce the coal we would have available to sell and our cash flow from operations; and
- Adverse changes in the metallurgical coal markets that would reduce the expected cash flow from operations.

If future cash flows were to become insufficient to meet our liquidity needs or capital requirements, due to changes in macroeconomic conditions or otherwise, we may reduce our expected level of capital expenditures for new mine production and/or fund a portion of our capital expenditures through the issuance of debt or equity securities, new debt arrangements, or from other sources such as asset sales.

The Company intends to pay a separate dividend on the Class B common stock based on the financial performance of CORE, as discussed earlier, in addition to the regular cash dividend on Class A common stock. Although both dividends are subject to the discretion of the Board of Directors, dividends paid on the Class B common stock will likely result in a new use of cash in future periods.

#### Indebtedness

Refer to Note 4 of Part I, Item 1 for information regarding the Company’s indebtedness. During July 2023, shortly after the balance sheet date, the Company repaid $11.0 million of its outstanding borrowings under the Revolving Credit Facility using funds from current operations.

### Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenue and expenses reported for the period then ended. A discussion of our critical accounting policies and estimates is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - critical Accounting Policies and Estimates” of the Annual Report. There were no material changes to our critical accounting policies during the first six months of 2023.

### Off-Balance Sheet Arrangements

A discussion of off-balance sheet arrangements is included under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Off-Balance Sheet Arrangements” in the Annual Report. There were no material changes during the first six months of 2023.

### Non-GAAP Financial Measures

*Adjusted EBITDA -* Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders, and rating agencies. We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance.

We define Adjusted EBITDA as net income plus net interest expense; stock-based compensation expense; depreciation, depletion, and amortization expenses; income taxes; accretion of asset retirement obligations; and, when applicable, certain non-operating expenses (charitable contributions). A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as a substitute to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

*(In thousands)*

| ​ ​ Reconciliation of Net Income to Adjusted EBITDA | ​ ​ | ​ ​ Three months ended June 30, 2023 ​ | ​ | ​ ​ 2022 ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2023 ​ | ​ | ​ ​ 2022 ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Net income | ​ | $7,556 | ​ | $33,280 | ​ | $32,813 | ​ | $74,751 |
| Depreciation, depletion, and amortization | ​ | 13,556 | ​ | 9,783 | ​ | 25,407 | ​ | 18,463 |
| Interest expense, net | ​ | 2,518 | ​ | 1,937 | ​ | 4,826 | ​ | 3,068 |
| Income tax expense | ​ | 2,467 | ​ | 9,818 | ​ | 8,016 | ​ | 20,472 |
| EBITDA | ​ | 26,097 | ​ | 54,818 | ​ | 71,062 | ​ | 116,754 |
| Stock-based compensation | ​ | 3,568 | ​ | 2,286 | ​ | 6,505 | ​ | 4,173 |
| Accretion of asset retirement obligation | ​ | 349 | ​ | 755 | ​ | 700 | ​ | 990 |
| Adjusted EBITDA | ​ | $30,014 | ​ | $57,859 | ​ | $78,267 | ​ | $121,917 |

*Non-GAAP revenue per ton -* Non-GAAP revenue per ton (FOB mine) is calculated as coal sales revenue less transportation costs, divided by tons sold. We believe revenue per ton (FOB mine) provides useful information to investors as it enables investors to compare revenue per ton we generate against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal prices from period to period excluding the impact of transportation costs which are beyond our control. The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Revenue per ton sold (FOB mine) is not a measure of financial performance in accordance with U.S. GAAP and, therefore, should not be considered as a substitute to revenue under U.S. GAAP.

*(In thousands, except per ton amounts)*

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2023 Company Produced ​ ​ | ​ ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2022 Company Produced ​ ​ | ​ ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Revenue | ​ | $132,571 | ​ | $4,898 | ​ | $137,469 | ​ | $137,714 | ​ | $941 | ​ | $138,655 |
| Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Transportation costs | ​ | (19,291) | ​ | (440) | ​ | (19,731) | ​ | (13,461) | ​ | — | ​ | (13,461) |
| Non-GAAP revenue (FOB mine) | ​ | $113,280 | ​ | $4,458 | ​ | $117,738 | ​ | $124,253 | ​ | $941 | ​ | $125,194 |
| Tons sold | ​ | 695 | ​ | 20 | ​ | 715 | ​ | 578 | ​ | 5 | ​ | 584 |
| Revenue per ton sold (FOB mine) | ​ | $163 | ​ | $226 | ​ | $165 | ​ | $215 | ​ | $186 | ​ | $215 |

#### May not foot due to rounding

*(In thousands, except per ton amounts)*

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2023 Company Produced ​ ​ | ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2022 Company Produced ​ ​ | ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Revenue | ​ | $291,530 | ​ | $12,299 | ​ | $303,829 | ​ | $288,643 | ​ | $4,894 | ​ | $293,537 |
| Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Transportation costs | ​ | (43,561) | ​ | (616) | ​ | (44,177) | ​ | (30,593) | ​ | (239) | ​ | (30,832) |
| Non-GAAP revenue (FOB mine) | ​ | $247,969 | ​ | $11,683 | ​ | $259,652 | ​ | $258,050 | ​ | $4,655 | ​ | $262,705 |
| Tons sold | ​ | 1,422 | ​ | 49 | ​ | 1,472 | ​ | 1,151 | ​ | 16 | ​ | 1,167 |
| Revenue per ton sold (FOB mine) | ​ | $174 | ​ | $238 | ​ | $176 | ​ | $224 | ​ | $299 | ​ | $225 |

#### May not foot due to rounding

*Non-GAAP cash cost per ton sold -* Non-GAAP cash cost per ton sold is calculated as cash cost of sales less transportation costs and idle mine costs, divided by tons sold. We believe cash cost per ton sold provides useful information to investors as it enables investors to compare our cash cost per ton against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal cost from period to period excluding the impact of transportation costs which are beyond our control. The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Cash cost per ton sold is not a measure of financial performance in accordance with U.S. GAAP and, therefore, should not be considered as a substitute to cost of sales under U.S. GAAP.

*(In thousands, except per ton amounts)*

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2023 Company Produced ​ ​ | ​ ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2022 Company Produced ​ ​ | ​ ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Cost of sales | ​ | $95,425 | ​ | $3,774 | ​ | $99,199 | ​ | $75,857 | ​ | $787 | ​ | $76,644 |
| Less: Adjustments to reconcile to Non-GAAP cash cost of sales | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Transportation costs | ​ | (19,298) | ​ | (434) | ​ | (19,732) | ​ | (13,459) | ​ | — | ​ | (13,459) |
| Non-GAAP cash cost of sales | ​ | $76,127 | ​ | $3,340 | ​ | $79,467 | ​ | $62,398 | ​ | $787 | ​ | $63,185 |
| Tons sold | ​ | 695 | ​ | 20 | ​ | 715 | ​ | 578 | ​ | 5 | ​ | 584 |
| Cash cost per ton sold | ​ | $109 | ​ | $169 | ​ | $111 | ​ | $108 | ​ | $155 | ​ | $108 |

#### May not foot due to rounding

*(In thousands, except per ton amounts)*

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2023 Company Produced ​ ​ | ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2022 Company Produced ​ ​ | ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Cost of sales | ​ | $199,671 | ​ | $10,077 | ​ | $209,748 | ​ | $153,720 | ​ | $4,177 | ​ | $157,897 |
| Less: Adjustments to reconcile to Non-GAAP cash cost of sales | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Transportation costs | ​ | (43,645) | ​ | (568) | ​ | (44,213) | ​ | (30,595) | ​ | (238) | ​ | (30,833) |
| Idle mine costs | ​ | (2,559) | ​ | ​ — | ​ | ​ (2,559) | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| Non-GAAP cash cost of sales | ​ | $153,467 | ​ | $9,509 | ​ | $162,976 | ​ | $123,125 | ​ | $3,939 | ​ | $127,064 |
| Tons sold | ​ | 1,422 | ​ | 49 | ​ | 1,472 | ​ | 1,151 | ​ | 16 | ​ | 1,167 |
| Cash cost per ton sold | ​ | $108 | ​ | $193 | ​ | $111 | ​ | $107 | ​ | $253 | ​ | $109 |

#### May not foot due to rounding

## Market risk

As filed, 138 characters.

Disclosures about market risk are included in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” of our Annual Report.

## Controls and procedures

As filed, 2,765 characters.

### Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our chief executive officer, who serves as our principal executive officer, and chief financial officer, who serves as our principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

### Changes in Internal Control over Financial Reporting

There were no changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Inherent Limitations on Effectiveness of Controls and Procedures

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

Our senior members of management do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

## Risk factors

As filed, 25,392 characters.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our Annual Report and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our business, financial condition, cash flows, or future results of operations. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or future results.

There have been no material changes in our risk factors from those described in our Annual Report except as set forth below:

### Risks Related to our Class B Common Stock Structure

***Holders of Class B common stock are common stockholders of the Company and, therefore, are subject to risks associated with an investment in the Company as a whole, even if a holder does not own shares of Class A common stock.***

We retain legal title to all of our assets and our tracking stock capitalization does not limit our legal responsibility, or that of our subsidiaries, for the liabilities included in any set of financial statement schedules. Holders of Class B common stock do not have any legal rights related to specific assets attributed to CORE and, in any liquidation, holders of Class B common stock and Class A common stock will be entitled to receive a pro rata share of our available net assets based on their respective numbers of shares.

***Our Board’s ability to reattribute businesses, assets and expenses between the Class A common stock and Class B common stock may make it difficult to assess the future prospects of a class of common stock based on past performance.***

Our Board currently expects to attribute 100% of the costs associated with the CORE Assets to Ramaco Resources and zero such costs to CORE; however, our Board is vested with discretion to reattribute businesses, assets and liabilities that are attributed to one class of common stock to another class of common stock, without the approval of any of our stockholders. Any such reattribution made by our Board, as well as the existence, in and of itself, of the right to effect a reattribution may impact the ability of investors to assess the future prospects of the businesses and assets attributed to a class of common stock, including liquidity and capital resource needs to pay the projected dividend to holders of our Class B common stock, based on past performance. Stockholders may also have difficulty evaluating the liquidity and capital resources of the businesses and assets attributed to each class of common stock based on past performance, as our Board may use the liquidity of one class to fund the liquidity of another class and capital expenditure requirements through the use of loans and interests between classes.

***We could be required to use assets attributed to one class of common stock to pay liabilities attributed to another class.***

The assets attributed to one class are potentially subject to the liabilities attributed to another class, even if those liabilities arise from lawsuits, contracts or indebtedness that are attributed to such other class. No provision of our

Second Amended and Restated Certificate of Incorporation (the “Amended Charter”) prevents us from satisfying liabilities of one class with assets of another class, and our creditors will not in any way be limited by our tracking stock capitalization from proceeding against any assets they could have proceeded against if we did not have a tracking stock capitalization.

***Dividends on our Class B common stock are discretionary and may fluctuate materially quarter to quarter. We cannot guarantee that we will be able to pay dividends in the future or what the actual dividends will be for any future periods.***

Our ability to pay dividends is subject to the discretion of our Board, the requirements of applicable law, any statutory or contractual restrictions on the payment of dividends, any prior rights and preferences that may be applicable to any outstanding preferred stock and commercial factors, whether or not attributable to the CORE Assets. We may lack sufficient cash to pay dividends to our Class B stockholders due to cash flow shortfalls attributable to a number of factors, many of which are beyond our control, as well as increases in corporate level general and administrative expenses, principal and interest payments on our outstanding debt, tax expenses, working capital requirements and anticipated cash needs. The timing and amount of dividends declared in future periods will depend on, among other things, (a) our earnings, earnings outlook, production, processing and shipping levels, financial condition, cash flow, cash requirements and our outlook on current and future market conditions, (b) our overall liquidity, (c) the restrictive covenants in the Second Amended and Restated Credit and Security Agreement and any future debt instruments that we may enter into and (d) provisions of applicable law governing the dividends. We have not established a minimum dividend payment for any class of our Common Stock, including our Class B common stock. Further our ability to pay and the amount of dividends declared in future periods may be harmed by other risk factors described herein and incorporated by reference herein. Our ability to pay dividends may fluctuate materially from quarter to quarter, and any quarterly estimate is subject to uncertainty due to the factors described above and elsewhere herein.

***The market price of the Class B common stock may not reflect the performance of CORE attributed to it, as we intend.***

We cannot assure the holders of Class B common stock that the market price of the Class B common stock related to CORE will, in fact, reflect the performance of CORE attributed to it. Holders of Class B common stock are common stockholders of the Company as a whole and, as such, are subject to all risks associated with an investment in the Company and all of our businesses, assets and liabilities. As a result, the market price of Class B common stock may, in part, reflect events that are intended to be reflected by the Class A common stock of the Company. In addition, investors may discount the value of Class B common stock because it is part of a common enterprise rather than a stand-alone entity.

***The market price of the Class B common stock may be volatile, could fluctuate substantially and could be affected by factors that do not affect traditional common stock.***

To the extent the market price of the Class B common stock tracks the performance of more focused classes of businesses and assets than our existing common stock does, the market price of the Class B common stock may be more volatile than the market price of our existing common stock has been historically. The market price of the Class B common stock may be materially affected by, among other things:

- actual or anticipated fluctuations CORE’s operating results;
- potential acquisition activity by the Company (regardless of the class to which it is attributed) or the companies in which we invest;
- issuances of debt or equity securities to raise capital by the Company or the companies in which we invest and the manner in which that debt or the proceeds of an equity issuance are attributed to each of the classes;
- changes in financial estimates by securities analysts regarding the Class B common stock, the Class A common stock or CORE attributable to the Class B common stock;
- the complex nature and the potential difficulties investors may have in understanding the terms of our new tracking stock, as well as concerns regarding the possible effect of certain of those terms on an investment in our stocks; and
- general market conditions.

Until an orderly trading market develops for the Class B common stock, the trading price of the Class B common stock may fluctuate significantly.

***The market value of the Class B common stock could be adversely affected by events involving the other assets and businesses of the Company.***

Because we are the issuer of the Class B common stock, an adverse market reaction to events relating to any of our assets and businesses, such as earnings announcements or announcements of new products or services, acquisitions or dispositions that the market does not view favorably, may cause an adverse market reaction in a particular class of common stock. This could occur even if the triggering event is not material to us as a whole. Certain events may also have a greater impact on one class than the same triggering event would have on another class due to the asset composition of the affected class. In addition, the incurrence of significant indebtedness by us or any of our subsidiaries on behalf of one class, including indebtedness incurred or assumed in connection with acquisitions of or investments in businesses, could affect our credit rating and that of our subsidiaries and, therefore, could increase the borrowing costs of businesses attributable to our other classes or the borrowing costs of the Company as a whole.

### We may not pay dividends equally or at all on our classes of common stock.

We have the right to pay dividends on the shares of Class A common stock and Class B common stock in equal or unequal amounts, and we may pay dividends on one class of common stock and not pay dividends on another class. In addition, any dividends or distributions on, or repurchases of, shares relating to a class will reduce our assets legally available to be paid as dividends on another class.

***Our new tracking stock capital structure could create conflicts of interest, and our Board may make decisions that could adversely affect only some holders of our common stock.***

Our tracking stock capital structure could give rise to occasions when the interests of holders of one class of common stock might diverge or appear to diverge from the interests of holders of another class of common stock. Our Class B common stock is not issued by a separate entity and thus holders of Class B common stock do not have the right to elect a separate board of directors. As a result, the Company’s officers and directors owe fiduciary duties to the Company as a whole and all of our stockholders as opposed to only holders of a particular class of common stock. Decisions deemed to be in the best interest of the Company and all of our stockholders may not be in the best interest of a particular class of common stock when considered independently. Examples include:

- decisions as to the terms of any business relationships between classes of common stock;
- the terms of any reattributions of assets between classes of common stock;
- decisions as to the allocation of consideration among the holders of Class B common stock and Class A common stock to be received in connection with a merger involving the Company;
- decisions as to the allocation of corporate opportunities between the classes, especially where the opportunities might meet the strategic business objectives of both classes;
- decisions as to operational and financial matters that could be considered detrimental to one class but beneficial to the other;
- decisions as to the conversion of shares of Class B common stock into shares of Class A common stock;
- decisions regarding the creation of, and, if created, the subsequent increase or decrease of any interest that one class of common stock may own in the other class of common stock;
- decisions as to the internal or external financing attributable to businesses or assets attributed to any of our classes of common stock;
- decisions as to the dispositions of assets of any of our classes of common stock; and
- decisions as to the payment of dividends on any of our classes of common stock.

***Our directors’ or officers’ equity ownership may create or appear to create conflicts of interest.***

If directors or officers own disproportionate interests (in percentage or value terms) in Class A common stock or Class B common stock, that disparity could create or appear to create conflicts of interest when they are faced with decisions that could have different implications for the holders of Class A common stock or Class B common stock.

We have not adopted any specific procedures for consideration of matters involving a divergence of interests among holders of Class A common stock or Class B common stock. Rather than develop additional specific procedures in advance, our Board intends to exercise its judgment from time to time, depending on the circumstances, as to how best to:

- obtain information regarding the divergence (or potential divergence) of interests;
- determine under what circumstances to seek the assistance of outside advisers;
- determine whether a committee of our Board should be appointed to address a specific matter and the appropriate members of that committee; and
- assess what is in the Company’s best interests and the best interests of all of our stockholders.

Our Board believes the advantage of retaining flexibility in determining how to fulfill its responsibilities in any such circumstances as they may arise outweighs any perceived advantages of adopting additional specific procedures in advance.

***Our Board does not expect to formally adopt any management or allocation policies with respect to the CORE Assets.***

The Board does not expect to formally adopt any management or allocation policies with respect to the CORE Assets to serve as guidelines in making decisions regarding the relationship between the Company’s overall business and CORE with respect to matters such as tax liabilities and benefits, loans between the two, attribution of assets, financing alternatives, corporate opportunities and similar items. Such determinations are in the sole discretion of our Board and our Board may at any time change or make exceptions to the relationship between CORE and Ramaco Resources. A decision to change, or make exceptions to, these arrangements could disadvantage one class of stockholder while advantaging the other.

***Holders of a class of common stock may not have any remedies if any action by our directors or officers has an adverse effect on only that class of common stock.***

Principles of applicable law and the provisions of our Amended Charter may protect decisions of our Board that have a disparate impact upon a particular class of common stock. Under applicable law, our Board has a duty to act with due care and in the best interests of all of our stockholders, regardless of the class of stock, or series, they hold. Principles of applicable law established in cases involving differing treatment of multiple classes or series of stock provide that a Board owes an equal duty to all stockholders and does not have separate or additional duties to any subset of stockholders. Judicial opinions in Delaware involving tracking stocks have established that decisions by directors or officers involving differing treatment of holders of tracking stocks may be judged under the business judgment rule. In some circumstances, our directors or officers may be required to make a decision that is viewed as adverse to the holders of a particular series of that stock. Under the principles of applicable law and the business judgment rule referred to above, the holders of Class B common stock may not be able to successfully challenge decisions that they believe have a disparate impact upon the stockholders of one of our classes if a majority of our Board is disinterested and independent with respect to the action taken, is adequately informed with respect to the action taken and acts in good faith and in the honest belief that our Board is acting in the best interest of the Company and all of our stockholders.

***Stockholders will not vote on how to attribute consideration received in connection with a merger involving the Company among holders of Class A common stock and Class B common stock.***

Our Amended Charter does not contain any provisions governing how consideration received in connection with a merger or consolidation involving the Company is to be to the holders of Class A common stock and Class B common stock, and none of the holders of Class A common stock and Class B common stock will have a separate class vote in the event of such a merger or consolidation. Consistent with applicable principles of applicable law, our Board will seek to divide the type and amount of consideration received in a merger or consolidation involving the Company among holders of Class A common stock and Class B common stock in a fair manner. As the different ways our Board may divide the consideration between holders of the different classes of stock might have materially different results, the consideration to be received by holders of Class B common stock in any such merger or consolidation may be materially less valuable than the consideration they would have received if they had a separate class vote on such merger or consolidation.

***We may dispose of assets of CORE without the approval of the Class B common stock holders.***

Applicable law requires stockholder approval only for a sale or other disposition of all or substantially all of the assets of the Company taken as a whole, and our Amended Charter does not require a separate class vote in the case of a sale of a significant amount of assets attributed to any of our classes of common stock. As long as the assets attributed to a certain class of common stock proposed to be disposed of represent less than substantially all of our assets, we may approve sales and other dispositions of any amount of the assets of such class without any stockholder approval.

Our Board will decide, in its sole discretion, how to proceed and is not required to select the option that would result in the highest value to holders of any particular class of stock.

***Holders of Class B common stock may receive less consideration upon a sale of the assets attributed to that class than if that class were a separate company.***

If CORE was a separate, independent company and its shares were acquired by another person, certain costs of that sale, including corporate level taxes, might not be payable in connection with that acquisition. As a result, stockholders of a separate, independent company with the same assets might receive a greater amount of proceeds than the holders of Class B common stock would receive upon a sale of all or substantially all of the assets of CORE. In addition, we cannot assure the holders of Class B common stock that in the event of such a sale the per share consideration to be paid to holders of Class B common stock will be equal to or more than the per share value of that share of stock prior to or after the announcement of a sale of all or substantially all of the assets of CORE. Further, there is no requirement that the consideration paid be tax-free to the holders of Class B common stock. Accordingly, if we sell all or substantially all of the assets attributed to CORE, our Class B stockholders could suffer a loss in the value of their investment in our Class B common stock.

***In the event of a liquidation of Ramaco Resources, holders of Class B common stock will not have a priority with respect to the assets attributed to CORE remaining for distribution to stockholders.***

Under the Amended Charter, upon Ramaco Resources’ liquidation, dissolution or winding up, holders of Class A common stock and Class B common stock will be entitled to receive, in respect of their shares of such stock, their proportionate interest in all of Ramaco Resources’ assets, if any, remaining for distribution to holders of common stock in proportion to their respective number of shares. Hence, the assets to be distributed to a holder of either class of common stock upon a liquidation, dissolution or winding up of Ramaco Resources will have nothing to do with the value of the assets attributed to the class of common stock or to changes in the relative value of the Class B common stock over time.

***Our Board may, in its sole discretion, elect to convert the Class B common stock to Class A common stock, thereby changing the nature of an investment in the Class B common stock and possibly diluting the economic interest in the Company of Class B common stock holders, which could result in a loss in value to such holders.***

Our Amended Charter permits our Board, in its sole discretion, to convert all of the outstanding shares of Class B common stock into shares of Class A common stock based on an exchange ratio determined by a 20-day trailing VWAP for each class of stock. A conversion would preclude the holders of Class B common stock from retaining their investment in a security that is intended to reflect separately the performance of CORE. We cannot predict the impact on the market value of our stock of (1) our Board’s ability to effect any such conversion or (2) the exercise of this conversion right by our Board. In addition, our Board may effect such a conversion at a time when the market value of our different stocks could cause the stockholders of one group to be disadvantaged.

***Holders of Class A common stock and Class B common stock vote together and have limited separate voting rights.***

Holders of Class A common stock and Class B common stock vote together as a single class, except in certain limited circumstances prescribed under applicable law. When holders of Class A common stock and Class B common stock vote together as a single class, holders having a majority of the votes will be in a position to control the outcome of the vote even if the matter involves a conflict of interest among our stockholders or has a greater impact on one class than another.

***Transactions in Class B common stock by our insiders could depress the market price of those stocks.***

Sales of, or hedging transactions such as collars relating to, shares of Class B common stock by any of our directors or executive officers, could cause a perception in the marketplace that the stock price of the Class B common stock has peaked or that adverse events or trends have occurred or may be occurring at the Company or with respect to the Class B common stock. This perception can result notwithstanding any personal financial motivation for these transactions. As a result, insider transactions could depress the market price for shares of the Class B common stock.

***Our capital structure, as well as the fact that CORE is not an independent company, may inhibit or prevent acquisition bids for CORE attributed to the Class B common stock and may make it difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders.***

If CORE was a separate independent company, any person interested in acquiring CORE without negotiating with management could seek control of that class by obtaining control of its outstanding voting stock, by means of a tender offer or a proxy contest. Although we intend Class B common stock to reflect the separate economic performance of CORE, it is not a separate entity, and a person interested in acquiring that class of common stock without negotiation with our management could obtain control of that class only by obtaining control of a majority in voting power of all of the outstanding voting shares of the Company. The existence of different classes of common stock could present complexities and in certain circumstances pose obstacles, financial and otherwise, to an acquiring person that are not present in companies that do not have a capital structure similar to ours.

***Certain provisions of our Amended Charter and bylaws may discourage, delay or prevent a change in control of the Company that a stockholder may consider favorable.***

These provisions include:

- authorizing a capital structure with multiple classes of common stock: a Class A common stock and Class B common stock;
- classifying our Board with staggered three-year terms, which may lengthen the time required to gain control of our Board;
- prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of the stockholders;
- limiting who may call special meetings of stockholders;
- establishing advance notice requirements for nominations of candidates for election to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings;
- requiring stockholder approval by holders of at least 66 2/3% of our aggregate voting power with respect to certain extraordinary matters, such as an amendment to our Amended Charter (excluding amendments to Section 4.1 thereof) or bylaws, and the approval by holders of at least 75% of our aggregate voting power for the removal of a director; and
- the existence of authorized and unissued stock, including “blank check” preferred stock, which could be issued by our Board to persons friendly to our then current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership of persons seeking to obtain control of the Company.

Filed Aug 9, 2023.
Source: SEC EDGAR, the filing index for accession 0001558370-23-014253. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.