Business Context and Reporting Period
This Form 8-K Current Report, dated November 4, 2025, details significant capital market transactions executed by Ramaco Resources, Inc. (Ramaco). The filing covers the entry into material definitive agreements regarding a convertible notes offering, amendments to existing credit facilities, and related hedging transactions completed between November 4 and November 7, 2025.
Key Financial Metrics and Transaction Details
- Convertible Notes Issuance: Ramaco issued $345,000,000 in aggregate principal amount of 0% Convertible Senior Notes due 2031. This includes a base offering of $300,000,000 and a full exercise of the $45,000,000 over-allotment option.
- Interest and Maturity: The Notes bear 0% regular interest and do not accrete. They mature on November 1, 2031. Special interest may accrue only upon specific reporting failures.
- Conversion Terms: The initial conversion rate is 30.5460 shares of Class A Common Stock per $1,000 principal amount, equating to an initial conversion price of approximately $32.74 per share.
- Hedging Costs: The Company entered into Capped Call Transactions with a cost of approximately $32.8 million to reduce potential dilution. The cap price is set at $54.5625 per share.
- Concurrent Delta Offering: Ramaco facilitated the short sale of 2,245,126 shares of Class A Common Stock borrowed from third parties to assist investors in hedging their Note positions. No new shares were issued in this transaction.
- Credit Facility Amendment: The Company amended its Second Amended and Restated Credit and Security Agreement to permit the Notes offering and establish a limit of up to $1,000,000,000 for permitted convertible indebtedness.
Material Changes Versus Prior Period
This filing represents a material change in the Company's capital structure through the addition of $345 million in senior unsecured debt. Unlike prior periods where the Company may have relied on different financing structures, this transaction introduces a zero-coupon convertible instrument with a maturity date of 2031. The amendment to the Credit Agreement specifically modifies covenants to accommodate this new debt instrument and the associated capped call transactions, which were not present in the prior comparable period.
Guidance, Outlook, and Risks
- Redemption Rights: The Company may redeem the Notes on or after November 6, 2028, if the Class A Common Stock price exceeds 130% of the conversion price for a specified period.
- Repurchase Rights: Upon a "Fundamental Change" (e.g., business combination or delisting), noteholders may require the Company to repurchase the Notes at par plus accrued special interest.
- Events of Default: The Indenture defines standard events of default, including payment defaults, bankruptcy, and failure to comply with covenants. A default in special interest payments has a 30-day cure period.
- Dilution Management: The Capped Call Transactions are designed to offset cash payments or share issuance upon conversion, subject to the cap price of $54.5625.
- Management Commentary: The filing does not provide specific forward-looking financial guidance or earnings outlook beyond the terms of the debt instruments.
Investor Verification Checklist
- Verify the full text of the Fourth Supplemental Indenture (Exhibit 4.2) for specific covenants and "Make-Whole Fundamental Change" definitions.
- Confirm the impact of the $32.8 million cost of the Capped Call Transactions on the Company's immediate cash position and balance sheet.
- Review the Fifth Amendment Agreement (Exhibit 10.1) to understand any new financial covenants or restrictions imposed on the existing Credit Agreement.
- Monitor the trading price of Class A Common Stock relative to the $32.74 conversion price and the $54.5625 cap price to assess conversion likelihood and hedging effectiveness.
- Check subsequent filings for the final use of proceeds from the $345 million Notes Offering.