Ramaco Resources, Inc. Earnings Per Share Disclosure

NOTE 13—EARNINGS (LOSS) PER SHARE

Earnings per share (“EPS”) is not presented retrospectively for periods prior to the issuance of the tracking stock as the tracking stock was not a part of the Company’s capital structure during those periods and the issuance of the tracking stock changes the common shareholders’ relative residual interest in the Company. Therefore, EPS is presented for the Company’s single class of common stock up to the time the tracking stock was issued. EPS is presented prospectively under the two-class method starting on the date of initial distribution of the tracking stock. Refer to Note 8 for information related to the Company’s tracking stock.

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

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Unvested restricted stock awards have the nonforfeitable right to receive cash dividends on the same basis as common shares; therefore, unvested restricted stock is considered a participating security for the purpose of calculating EPS. Prior to the issuance of Class B common stock, the Company presented its EPS for its common stock and unvested restricted stock on a combined basis since both instruments participated in net earnings on the same basis and the resulting EPS is typically the same. Starting under the two-class method, the Company reports separately the net earnings allocated away from holders of Class A and Class B common stock to holders of unvested restricted stock awards.

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Unvested restricted stock units and performance stock units include forfeitable dividend rights that are subject to the vesting conditions of the underlying awards; therefore, these awards are not considered participating securities and should not be allocated undistributed earnings for the purpose of calculating EPS. However, dividends or dividend equivalents declared and charged to retained earnings for these awards reduce the amount of net earnings available for distribution to common stockholders and should be reflected as such under the two-class method.

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As described in Note 8, the Company declared a non-cash dividends to Class A shareholders in 2024 and 2025, which resulted in the issuance shares of Class B common shares. Since the dividends involved different classes of common stock, the distributions of the shares were accounted for prospectively for EPS purposes and the non-cash dividends were attributed to Class A net earnings under the two-class method. The December 5, 2024 non-cash dividends to Class A shareholders in the form of Class B common shares were not issued and were not determinable at December 31, 2024 such that the Company estimated the number of Class B common shares and unvested awards for Class B diluted EPS purposes at that time.

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The Company also declared non-cash dividends to Class B shareholders during 2024 and 2025, which resulted in the issuance of Class B common shares. Since the Class B shareholders’ proportional interest in the Company’s overall net assets did not remain the same after each issuance, the distribution of these shares were accounted for prospectively for EPS purposes and non-cash dividends were attributed to Class B net earnings under the two-class method.

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For accounting purposes, Class B’s participation rights in net earnings are, in substance, discretionary based on the power of the Company’s Board of Directors to add or modify expense allocation policies, redefine CORE assets, and redetermine CORE’s per-ton usage fees at any time, in its sole discretion, without shareholder approval. Therefore, no amount of the Company’s net earnings shall be allocated to Class B for the purpose of calculating EPS other than actual cash dividends declared during the period for the tracking stock. However, during 2025, dividends declared by the Company were in excess of consolidated net income, which resulted in an undistributed net loss for reporting purposes. The resulting undistributed net loss was allocated proportionately between outstanding Class A and Class B common stock based on the rights to residual net assets upon liquidation being equal between holders of Class A and Class B common stock. Refer to Note 8 for information regarding dividends declared on Class B common stock.

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Diluted EPS was calculated using the treasury stock method for stock options and restricted stock units. For performance stock units, the awards were first evaluated under the contingently issuable shares guidance, which requires a determination as to whether shares would be issuable if the end of the reporting period were the end of the contingency period. For shares determined to be issuable under performance stock unit awards, the treasury stock method was then applied to determine the dilutive impact of the awards, if any. Unvested restricted stock awards are considered potential common shares as well as participating securities, as discussed previously, and were included in diluted EPS using the more dilutive of the treasury stock method or the two-class method. Since these awards share in cash dividends on a 1:1 basis with common shares, applying the treasury stock method would be antidilutive compared to the basic EPS calculation that allocates earnings to participating securities under the two-class method discussed previously.

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As discussed in Note 8, the Board of Directors retains the ability, in its sole discretion, to exchange all outstanding shares of Class B common stock into Class A common stock based on an exchange ratio determined by a 20-day trailing volume-weighted average price for each class of stock. The conversion right was evaluated for diluted EPS purposes under the if-converted method, which determines the potential dilutive effect, if any, on Class A shareholders assuming that conversion occurs. The hypothetical conversion assumed to have occurred would have resulted in the issuance of approximately 7.2 million shares and potential common shares and 8.0 million shares and potential common shares of Class A common stock for 2025 and 2024, respectively, based on year-to-date outstanding averages for those years, and would have effectively redistributed Class B’s net earnings to Class A.

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The hypothetical conversion of Class B common stock into Class A common stock, as discussed above, was excluded from the EPS calculation for each period presented as the effect would have been antidilutive. In addition, antidilutive shares excluded from the dilutive EPS calculation are presented below:

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Diluted EPS for the period from January 1, 2023 through June 20, 2023, the period for which a single class of common stock existed, excluded all outstanding restricted stock units, or 684 thousand units in total, because the effect would have been antidilutive. In addition, diluted EPS for the same period excluded outstanding performance stock units originally granted in 2022, or 249 thousand units at target, based on the guidance for contingently issuable shares. For the period from June 21, 2023 through December 31, 2023, the hypothetical conversion of Class B common stock into Class A common stock was immaterial, and no other potential common shares were excluded from the computation of diluted EPS for either class of common stock.