Ramaco Resources (METCB) risk factors, FY2024 10-K

Other

1. 01Certain of properties have not yet been fully developed into producing coal mines and, if we experience any development delays or cost increases or are unable to complete the construction of our facilities, our business, financial condition and results of operations could be adversely affected
2. 02Our customer base is highly dependent on the steel industry
3. 03A substantial or extended decline in the prices we receive for our coal could adversely affect our business, results of operations, financial condition, cash flows and ability to pay dividends to our stockholders
4. 04The availability and reliability of transportation facilities and fluctuations in transportation costs could affect the demand for our coal or impair our ability to supply coal to prospective customers
5. 05Our ability to collect payments from customers could be impaired if their creditworthiness declines or if they fail to honor their contracts with us
6. 06Current and future government laws, regulations and other legal requirements relating to protection of the environment and natural resources may increase our costs of doing business and may restrict our coal operations
7. 07We and our significant stockholders are subject to the Applicant Violator System
8. 08We have reclamation, mine closing, and related environmental obligations under the SMCRA. If the assumptions underlying our accruals are inaccurate, we could be required to expend greater amounts than anticipated
9. 09Our 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
10. 10Our tracking stock capital structure could create conflicts of interest, and our Board may make decisions that could adversely affect only the holders of one class of our common stock
11. 11Our future indebtedness could adversely affect our business, financial condition, results of operations, and ability to meet our payment obligations under the Senior Notes and our other debt
12. 12If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the Senior Notes

Risks Related to Our Business

1. 13Certain of our properties have not yet been fully developed into producing coal mines and, if we experience any development delays or cost increases or are unable to complete the construction of our facilities, our business, financial condition and results of operations could be adversely affected
2. 14If we are unable to complete or are substantially delayed in completing the development of any of our properties, our business, financial condition, results of operations cash flows and ability to pay dividends to our stockholders could be adversely affected
3. 15We are exposed to risks associated with an increasingly concentrated customer base both domestically and globally
4. 16Our operations may be disrupted, and our financial results may be adversely affected, by global outbreaks of contagious diseases, including COVID-19
5. 17The failure to access coal preparation facilities may have a material adverse effect on our ability to produce coal for our prospective customers and to meet quality specifications
6. 18restrictions or regulations imposed by governmental or regulatory authorities
7. 19Product alternatives or other technologies may reduce demand for our products
8. 20future operating costs, including the cost of materials, and capital expenditures
9. 21Our inability to acquire additional coal reserves that are economically recoverable may have a material adverse effect on our future profitability
10. 22We are dependent on contractors for the successful completion of the development of our properties
11. 23increased utilization by the steel industry of electric arc furnaces or pulverized coal injection processes, which reduce or eliminate the use of furnace coke, an intermediate product produced from metallurgical coal, and generally decrease the demand for metallurgical coal
12. 24Changes in the global economic environment, inflation, rising interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict, could have an adverse effect on our industry and business, as well as those of our customers and suppliers
13. 25The ongoing war in Ukraine has had a broad range of adverse impacts on global economic conditions, some of which have had and are likely to continue to have adverse impacts on our business, including increased raw material and energy costs, softer customer demand and lower steel prices
14. 26Increased competition or a loss of our competitive position could adversely affect sales of, or prices for, our coal, which could impair our profitability. In addition, foreign currency fluctuations could adversely affect the competitiveness of our coal abroad
15. 27other hazards or occurrences that could also result in personal injury and loss of life, pollution and suspension of operations
16. 28repair and remediation costs
17. 29Our operations are located in a single geographic region, making us vulnerable to risks associated with operating in a single geographic area, including adverse impacts of weaker conditions associated with climate change
18. 30Any significant downtime of our major pieces of mining equipment, including any preparation plants, could impair our ability to supply coal to prospective customers and materially and adversely affect our results of operations
19. 31If customers do not enter into, extend or honor contracts with us, our profitability could be adversely affected
20. 32We may be unsuccessful in integrating the operations of any future acquisitions, including acquisitions involving new lines of business, with our existing operations, and in realizing all or any part of the anticipated benefits of any such acquisitions
21. 33We may not be able to obtain equipment, parts and supplies in a timely manner, in sufficient quantities or at reasonable costs to support our coal mining and transportation operations
22. 34We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments
23. 35Our operations could be adversely affected if we are unable to obtain required financial assurance, or if the costs of financial assurance increase materially
24. 36Our mines are located in areas containing oil and natural gas operations, which may require us to coordinate our operations with those of oil and natural gas drillers
25. 37Defects in title or loss of any leasehold interests in our properties could limit our ability to conduct mining operations on these properties or result in significant unanticipated costs
26. 38While none of our employees who conduct mining operations are currently members of unions, our business could be adversely affected by union activities
27. 39A shortage of skilled labor in the mining industry could pose a risk to achieving improved labor productivity, which could adversely affect our profitability
28. 40We may face restricted access to international markets in the future
29. 41We may be subject to additional limitations on our ability to conduct mining operations due to federal jurisdiction
30. 42Our lessees could satisfy obligations to their customers with minerals from properties other than ours, depriving us of the ability to receive amounts in excess of minimum royalty payments
31. 43A lessee may incorrectly report royalty revenues, which might not be identified by our lessee audit process or our mine inspection process or, if identified, might be identified in a subsequent period
32. 44Because of the unique difficulties and uncertainties inherent in technology development, we face a risk of not being able to capitalize on our license or ownership of intellectual property
33. 45Successful technical development of technologies associated with intellectual property does not guarantee successful commercialization
34. 46If we fail to protect our intellectual property rights, we could lose our ability to compete in the market
35. 47Other companies may claim that we infringe their intellectual property, which could materially increase our costs and harm our ability to generate future revenue and profit

Risks Related to Environmental, Health, Safety and Other Regulations

1. 48Current or future U.S. administrations and Congress could enact legislative and regulatory measures that could adversely affect our mining operations or cost structure or our customers’ ability to use coal, which could have a material adverse effect on our financial condition and results of operations
2. 49Current and future laws, regulations and other legal requirements relating to protection of the environment and natural resources may increase our costs of doing business and may restrict our coal operations
3. 50the effects of operations on surface water and groundwater quality and availability
4. 51Our operations may impact the environment or cause exposure to hazardous substances, and our properties may have environmental contamination, which could expose us to significant costs and liabilities
5. 52We must obtain, maintain, and renew governmental permits and approvals for mining operations, which can be a costly and time-consuming process and result in restrictions on our operations
6. 53Federal or state regulatory agencies have the authority to order certain of our mines to be temporarily or permanently closed under certain circumstances, which could materially and adversely affect our ability to meet our customers’ demands
7. 54Our customers are subject to extensive existing and future laws, regulations and other legal requirements relating to protection of the environment, which could negatively impact our business and the market for our products

Risks Related to Our Company

1. 55Our ability to pay dividends on our Class A common stock and our Class B common stock may be limited by the amount of cash we generate from operations following the payment of fees and expenses, by restrictions in debt instruments and by additional factors unrelated to our profitability
2. 56the amount of any cash reserves established by our board of directors
3. 57In addition, financing agreements may prohibit the payment of dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends
4. 58As of December 31, 2022, we ceased being an emerging growth company and, as a result, we have incurred and expect to continue to incur significant additional legal and financial compliance costs by complying with increased disclosure and governance requirements
5. 59the requirement to provide detailed compensation discussion and analysis in proxy statements and reports filed under the Exchange Act; and
6. 60Our Amended Charter and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our Class A common stock and Class B common stock
7. 61establishing advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings
8. 62stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents
9. 63We have identified a material weakness in our internal control over financial reporting. Our systems and procedures for internal control over financial reporting and the disclosure controls related to them have, and may have in the future, material weaknesses, which may adversely affect the value of our common stock

Risks Related to Our Class B Common Stock Structure

1. 64Holders 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
2. 65Our 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
3. 66We could be required to use assets attributed to one class of common stock to pay liabilities attributed to another class
4. 67Dividends 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
5. 68The market price of the Class B common stock may not reflect the performance of CORE attributed to it, as we intend
6. 69The market price of the Class B common stock has been volatile, has fluctuated substantially, and could be affected by factors that do not affect traditional common stock
7. 70The market value of the Class B common stock could be adversely affected by events involving the other assets and businesses of the Company
8. 71We may not pay dividends equally or at all on our classes of common stock
9. 72Our directors’ or officers’ equity ownership may create or appear to create conflicts of interest
10. 73assess what is in the Company’s best interests and the best interests of all of our stockholders
11. 74Our Board does not expect to formally adopt any management or allocation policies with respect to the CORE Assets
12. 75Holders 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
13. 76Stockholders 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
14. 77We may dispose of assets of CORE without the approval of the Class B common stockholders
15. 78Holders 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
16. 79In 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
17. 80Holders of Class A common stock and Class B common stock vote together and have limited separate voting rights
18. 81Transactions in Class B common stock by our insiders could depress the market price of those stocks
19. 82Our 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
20. 83Certain 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

Risks Related to Our Senior Notes

1. 84The terms of the indentures governing our Senior Notes and the agreements and instruments governing our other indebtedness, including the Credit Agreement, and surety bonding obligations impose restrictions that may limit our operating and financial flexibility
2. 85receive dividends or other payments from subsidiaries in certain cases
3. 86We may be able to incur substantially more debt, which could have important consequences to you
4. 87it may make us more vulnerable to downturns in our business, our industry or the economy in general
5. 88any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations under the Senior Notes and our other debt
6. 89The Senior Notes are unsecured and therefore are effectively subordinated to any secured indebtedness that we currently have or that we may incur in the future and rank pari passu with, which means equal to, all outstanding and future unsecured unsubordinated indebtedness issued by us and our general liabilities
7. 90The Senior Notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries
8. 91Our subsidiaries conduct the substantial majority of our operations and own our operating assets
9. 92The indentures under which the Senior Notes have been issued contain limited protection for holders of the Senior Notes
10. 93create restrictions on the payment of dividends or other amounts to us from our subsidiaries
11. 94An increase in market interest rates could result in a decrease in the value of the Senior Notes
12. 95A downgrade, suspension or withdrawal of the credit rating assigned by a rating agency to us or the Senior Notes, if any, could cause the liquidity or market value of the Senior Notes to decline significantly
13. 96The credit ratings for the Senior Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency
14. 97Changes in tax legislation could have an adverse impact on our cash tax liabilities, results of operations or financial condition
15. 98Debt we incur in the future may limit our flexibility to obtain financing and to pursue other business opportunities
16. 99our flexibility in responding to changing business and economic conditions may be limited
17. 100If securities or industry analysts adversely change their recommendations regarding our stock or if our operating results do not meet their expectations, our stock price could decline
18. 101Our ability to operate effectively could be impaired if we fail to attract and retain key personnel
19. 102We could fail to retain customers or gain new ones
20. 103Terrorist attacks or cyber-incidents could result in information theft, data corruption, operational disruption and/or financial loss
21. 104Failure to adequately protect critical data and technology systems and the impact of data privacy regulation could materially affect us