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What changed in HALLADOR ENERGY CO's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HALLADOR ENERGY CO's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+523 added−882 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-17)

Top changes in HALLADOR ENERGY CO's 2025 10-K

523 paragraphs added · 882 removed · 119 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

109 edited+62 added−101 removed28 unchanged
Biggest changeFINANCIAL STATEMENTS Hallador Energy Company Consolidated Balance Sheets As of December 31, (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 7,232 $ 2,842 Restricted cash ​ 4,921 4,281 Accounts receivable ​ 15,438 19,937 Inventory ​ 36,685 23,075 Parts and supplies ​ 39,104 38,877 Prepaid expenses ​ 1,478 2,262 Assets held-for-sale ​ ​ — ​ ​ 1,540 Total current assets ​ 104,858 92,814 Property, plant and equipment: ​ Land and mineral rights ​ 70,307 115,486 Buildings and equipment ​ 429,857 537,131 Mine development ​ 92,458 158,642 Finance lease right-of-use assets ​ 13,034 12,346 Total property, plant and equipment ​ 605,656 823,605 Less - accumulated depreciation, depletion and amortization ​ (347,952) (334,971) Total property, plant and equipment, net ​ 257,704 488,634 Equity method investments ​ 2,607 2,811 Other assets ​ 3,951 5,521 Total assets ​ $ 369,120 $ 589,780 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ Current liabilities: ​ Current portion of bank debt, net ​ $ 4,095 $ 24,438 Accounts payable and accrued liabilities ​ 44,298 62,908 Current portion of lease financing ​ 6,912 3,933 Contract liabilities - current ​ 97,598 66,316 Total current liabilities ​ 152,903 157,595 Long-term liabilities: ​ Bank debt, net ​ 37,394 63,453 Convertible notes payable ​ — 10,000 Convertible notes payable - related party ​ — 9,000 Long-term lease financing ​ 8,749 8,157 Deferred income taxes ​ — 9,235 Asset retirement obligations ​ 14,957 14,538 Contract liabilities - long-term ​ 49,121 47,425 Other ​ 1,711 1,789 Total long-term liabilities ​ 111,932 163,597 Total liabilities ​ 264,835 321,192 Commitments and contingencies (Note 22) ​ Stockholders' equity: ​ Preferred stock, $.10 par value, 10,000 shares authorized; none issued ​ — — Common stock, $.01 par value, 100,000 shares authorized; 42,621 and 34,052 issued and outstanding, as of December 31, 2024 and December 31, 2023, respectively ​ 426 341 Additional paid-in capital ​ 189,298 127,548 Retained earnings (deficit) ​ (85,439) 140,699 Total stockholders’ equity ​ 104,285 268,588 Total liabilities and stockholders’ equity ​ $ 369,120 $ 589,780 ​ The accompanying notes are an integral part of these Consolidated Financial Statements ​ 65 Table of Contents Hallador Energy Company Consolidated Statements of Operations For the years ended December 31, (in thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 SALES AND OPERATING REVENUES: ​ ​ Electric sales ​ $ 261,527 ​ $ 267,927 Coal sales ​ 137,448 ​ 361,926 Other revenues ​ 5,419 ​ 5,025 Total sales and operating revenues ​ 404,394 ​ 634,878 EXPENSES: ​ ​ Fuel ​ ​ 49,343 ​ ​ 103,388 Other operating and maintenance costs ​ ​ 118,364 ​ ​ 199,855 Cost of purchased power ​ ​ 10,888 ​ ​ — Utilities ​ ​ 15,914 ​ ​ 17,730 Labor ​ ​ 116,164 ​ ​ 152,417 Depreciation, depletion and amortization ​ 65,626 ​ 67,211 Asset retirement obligations accretion ​ 1,628 ​ 1,804 Exploration costs ​ 260 ​ 904 General and administrative ​ 26,527 ​ 26,159 Asset impairment ​ ​ 215,136 ​ ​ — (Gain) loss on disposal or abandonment of assets, net ​ ​ (50) ​ ​ 398 Settlement of litigation ​ ​ 2,750 ​ ​ — Total operating expenses ​ 622,550 ​ 569,866 ​ ​ ​ ​ ​ ​ ​ INCOME (LOSS) FROM OPERATIONS ​ (218,156) ​ 65,012 ​ ​ ​ ​ ​ ​ ​ Interest expense (1) ​ (13,850) ​ (13,711) Loss on extinguishment of debt ​ (2,790) ​ (1,491) Equity method investment (loss) ​ (746) ​ (552) NET INCOME (LOSS) BEFORE INCOME TAXES ​ (235,542) ​ 49,258 ​ ​ ​ ​ ​ ​ ​ INCOME TAX EXPENSE (BENEFIT): ​ ​ Current ​ (169) ​ (164) Deferred ​ (9,235) ​ 4,629 Total income tax expense (benefit) ​ (9,404) ​ 4,465 ​ ​ ​ ​ ​ ​ ​ NET INCOME (LOSS) ​ $ (226,138) ​ $ 44,793 ​ ​ ​ ​ ​ ​ ​ NET INCOME (LOSS) PER SHARE: ​ ​ Basic ​ $ (5.72) ​ $ 1.35 Diluted ​ $ (5.72) ​ $ 1.25 ​ ​ ​ ​ ​ ​ ​ WEIGHTED AVERAGE SHARES OUTSTANDING ​ ​ Basic ​ 39,504 ​ 33,133 Diluted ​ 39,504 ​ 36,827 ​ ​ ​ ​ ​ ​ ​ ​ (1) Interest Expense: ​ ​ Interest on bank debt $ 9,286 $ 8,636 Other interest ​ 2,817 ​ 1,842 Amortization: ​ ​ ​ Amortization of debt issuance costs ​ 1,747 ​ 3,233 Total amortization ​ 1,747 ​ 3,233 Total interest expense ​ $ 13,850 ​ $ 13,711 The accompanying notes are an integral part of these Consolidated Financial Statements ​ 66 Table of Contents Hallador Energy Company Consolidated Statements of Cash Flows For the years ended December 31, (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ Net income (loss) ​ $ (226,138) ​ $ 44,793 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ Deferred income tax (benefit) ​ (9,235) ​ 4,629 Equity method investment (loss) ​ 746 ​ 552 Cash distribution - equity method investment ​ — ​ 625 Depreciation, depletion and amortization ​ 65,626 ​ 67,211 Asset impairment ​ ​ 215,136 ​ ​ — Loss on extinguishment of debt ​ 2,790 ​ 1,491 (Gain) loss on disposal or abandonment of assets, net ​ (50) ​ 398 Amortization of debt issuance costs ​ 1,747 ​ 3,233 Asset retirement obligations accretion ​ 1,628 ​ 1,804 Cash paid on asset retirement obligation reclamation ​ (1,407) ​ (3,384) Stock-based compensation ​ 4,454 ​ 3,554 Amortization of contract asset and contract liabilities ​ (70,203) ​ (97,018) Director fees paid in stock ​ ​ 150 ​ ​ — Change in current assets and liabilities: ​ ​ ​ Accounts receivable ​ 4,499 ​ 9,952 Inventory ​ (13,610) ​ 15,548 Parts and supplies ​ (227) ​ (10,582) Prepaid expenses ​ 784 ​ 1,186 Accounts payable and accrued liabilities ​ (14,580) ​ (18,992) Contract liabilities ​ 103,181 ​ 33,804 Other ​ 643 ​ 610 Net cash provided by operating activities ​ $ 65,934 ​ $ 59,414 ​ ​ ​ ​ ​ 67 Table of Contents Hallador Energy Company Consolidated Statements of Cash Flows For the years ended December 31, (in thousands) (continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ Capital expenditures ​ $ (53,367) ​ $ (75,352) Proceeds from sale of equipment ​ 4,239 ​ 62 Proceeds from held-for-sale assets ​ ​ 3,200 ​ ​ — Investment in equity method investments ​ ​ (542) ​ ​ — Net cash used in investing activities ​ (46,470) ​ (75,290) ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ Payments on bank debt ​ (147,000) ​ (59,713) Borrowings of bank debt ​ 99,500 ​ 66,000 Payments on lease financing ​ ​ (5,633) ​ ​ — Proceeds from sale and leaseback arrangement ​ 5,134 ​ 11,082 Issuance of related party notes payable ​ 5,000 ​ — Payments on related party notes payable ​ (5,000) ​ — Debt issuance costs ​ (673) ​ (6,013) ATM offering ​ 34,515 ​ 7,318 Taxes paid on vesting of RSUs ​ (277) ​ (2,101) Net cash provided by (used in) financing activities ​ (14,434) ​ 16,573 Increase in cash, cash equivalents, and restricted cash ​ 5,030 ​ 697 Cash, cash equivalents, and restricted cash, beginning of year ​ 7,123 ​ 6,426 Cash, cash equivalents, and restricted cash, end of year ​ $ 12,153 ​ $ 7,123 ​ ​ ​ ​ ​ ​ ​ CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: ​ ​ Cash and cash equivalents ​ $ 7,232 ​ $ 2,842 Restricted cash ​ 4,921 ​ 4,281 ​ ​ $ 12,153 ​ $ 7,123 ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL CASH FLOW INFORMATION: ​ ​ Cash paid for interest ​ $ 10,511 ​ $ 9,966 ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL NON-CASH FLOW INFORMATION: ​ ​ ​ Change in capital expenditures included in accounts payable and prepaid expense ​ $ 356 ​ $ 1,882 ​ The accompanying notes are an integral part of these Consolidated Financial Statements ​ 68 Table of Contents Hallador Energy Company Consolidated Statement of Stockholders’ Equity (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Retained ​ Total ​ ​ Common Stock Issued ​ Paid-in ​ Earnings ​ Stockholders’ ​ Shares Amount Capital (Deficit) ​ Equity BALANCE, DECEMBER 31, 2022 32,983 ​ $ 330 ​ $ 118,788 ​ $ 95,906 ​ $ 215,024 Stock-based compensation — ​ — ​ 3,554 ​ — ​ 3,554 Stock issued on vesting of RSUs 473 ​ 5 ​ (5) ​ — ​ — Taxes paid on vesting of RSUs (198) ​ (2) ​ (2,099) ​ — ​ (2,101) Stock issued in ATM offering 794 ​ 8 ​ 7,310 ​ — ​ 7,318 Net income — ​ — ​ — ​ 44,793 ​ 44,793 BALANCE, DECEMBER 31, 2023 34,052 ​ $ 341 ​ $ 127,548 ​ $ 140,699 ​ $ 268,588 Stock-based compensation — ​ — ​ 4,454 ​ — ​ 4,454 Stock issued on vesting of RSUs 380 ​ 4 ​ (4) ​ — ​ — Taxes paid on vesting of RSUs (159) ​ (2) ​ (275) ​ — ​ (277) Stock issued on redemption of convertible notes ​ 3,672 ​ ​ 36 ​ ​ 22,957 ​ ​ — ​ ​ 22,993 Stock issued in ATM offering 4,655 ​ 47 ​ 34,468 ​ — ​ 34,515 Stock issued for director fees ​ 21 ​ ​ — ​ ​ 150 ​ ​ — ​ ​ 150 Net loss — ​ — ​ — ​ (226,138) ​ (226,138) BALANCE, DECEMBER 31, 2024 42,621 ​ $ 426 ​ $ 189,298 ​ $ (85,439) ​ $ 104,285 ​ The accompanying notes are an integral part of these Consolidated Financial Statements ​ 69 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The consolidated financial statements include the accounts of Hallador Energy Company (hereinafter, “we”, “our” or “us”) and our wholly owned subsidiaries Hallador Power Company, LLC (“Hallador Power”), Sunrise Coal, LLC (“Sunrise”), and Hourglass Sands, LLC (“Hourglass”), as well as Hallador Power and Sunrise’s wholly owned subsidiaries.
Biggest changeFINANCIAL STATEMENTS Hallador Energy Company Consolidated Balance Sheets As of December 31, (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 10,070 $ 7,232 Restricted cash ​ 5,302 4,921 Accounts receivable ​ 13,989 15,438 Inventory ​ 42,534 36,685 Parts and supplies ​ 45,854 39,104 Prepaid expenses ​ 5,638 1,478 Total current assets ​ 123,387 104,858 Property, plant and equipment: ​ ​ ​ Land and mineral rights ​ 69,952 70,307 Buildings and equipment ​ 421,037 402,649 Mine development ​ 102,302 92,458 Construction work in process ​ ​ 39,671 ​ ​ 27,208 Finance lease right-of-use assets ​ 12,591 13,034 Total property, plant and equipment ​ 645,553 605,656 Less - accumulated depreciation, depletion and amortization ​ (367,775) (347,952) Total property, plant and equipment, net ​ 277,778 257,704 Equity method investments ​ 2,647 2,607 Other assets ​ 4,241 3,951 Total assets ​ $ 408,053 $ 369,120 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ ​ Current liabilities: ​ ​ ​ Current portion of bank debt, net ​ $ — $ 4,095 Accounts payable and accrued liabilities ​ 41,848 44,298 Current portion of lease financing ​ 7,411 6,912 Contract liabilities - current ​ 103,343 97,598 Total current liabilities ​ 152,602 152,903 Long-term liabilities: ​ ​ ​ Bank debt, net ​ 29,678 37,394 Long-term lease financing ​ 1,338 8,749 Deferred income taxes ​ 1,833 — Asset retirement obligations ​ 15,241 14,957 Contract liabilities - long-term ​ 45,714 49,121 Other ​ 1,814 1,711 Total long-term liabilities ​ 95,618 111,932 Total liabilities ​ 248,220 264,835 Commitments and contingencies (Note 22) ​ ​ ​ Stockholders' equity: ​ ​ ​ Preferred stock, $.10 par value, 10,000 shares authorized; none issued ​ — — Common stock, $.01 par value, 100,000 shares authorized; 43,817 and 42,621 issued and outstanding, as of December 31, 2025 and December 31, 2024, respectively ​ 438 426 Additional paid-in capital ​ 202,963 189,298 Retained deficit ​ (43,568) (85,439) Total stockholders’ equity ​ 159,833 104,285 Total liabilities and stockholders’ equity ​ $ 408,053 $ 369,120 The accompanying notes are an integral part of these Consolidated Financial Statements ​ 63 Table of Contents Hallador Energy Company Consolidated Statements of Operations For the years ended December 31, (in thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 SALES AND OPERATING REVENUES: ​ ​ ​ ​ Electric sales ​ $ 310,737 ​ $ 261,527 Coal sales ​ 148,655 ​ 137,448 Other revenues ​ 10,074 ​ 5,184 Total sales and operating revenues ​ 469,466 ​ 404,159 EXPENSES: ​ ​ ​ ​ Fuel ​ ​ 63,854 ​ ​ 49,343 Other operating and maintenance costs ​ ​ 129,246 ​ ​ 118,364 Cost of purchased power ​ ​ 20,892 ​ ​ 10,888 Utilities ​ ​ 16,801 ​ ​ 15,914 Labor ​ ​ 110,678 ​ ​ 116,164 Depreciation, depletion and amortization ​ 41,222 ​ 65,626 Asset retirement obligations accretion ​ 1,764 ​ 1,628 Exploration costs ​ 216 ​ 260 General and administrative ​ 26,226 ​ 26,527 Gain on disposal or abandonment of assets, net ​ ​ (2,489) ​ ​ (50) Asset impairment ​ ​ — ​ ​ 215,136 Settlement of litigation ​ ​ — ​ ​ 2,750 Total operating expenses ​ 408,410 ​ 622,550 ​ ​ ​ ​ ​ ​ ​ INCOME (LOSS) FROM OPERATIONS ​ 61,056 ​ (218,391) ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ 602 ​ ​ 235 Interest expense (1) ​ (16,896) ​ (13,850) Loss on extinguishment of debt ​ (608) ​ (2,790) Equity method investment (loss) ​ (450) ​ (746) NET INCOME (LOSS) BEFORE INCOME TAXES ​ 43,704 ​ (235,542) ​ ​ ​ ​ ​ ​ ​ INCOME TAX EXPENSE (BENEFIT): ​ ​ ​ ​ Current ​ — ​ (169) Deferred ​ 1,833 ​ (9,235) Total income tax expense (benefit) ​ 1,833 ​ (9,404) ​ ​ ​ ​ ​ ​ ​ NET INCOME (LOSS) ​ $ 41,871 ​ $ (226,138) ​ ​ ​ ​ ​ ​ ​ NET INCOME (LOSS) PER SHARE: ​ ​ ​ ​ Basic ​ $ 0.98 ​ $ (5.72) Diluted ​ $ 0.96 ​ $ (5.72) ​ ​ ​ ​ ​ ​ ​ WEIGHTED AVERAGE SHARES OUTSTANDING ​ ​ ​ ​ Basic ​ 42,932 ​ 39,504 Diluted ​ 43,432 ​ 39,504 ​ ​ ​ ​ ​ ​ ​ (1) Interest Expense: ​ ​ ​ ​ Interest on bank debt $ 5,806 ​ ​ ​ $ 9,286 Other interest ​ 9,097 ​ 2,817 Amortization of debt issuance costs ​ 1,993 ​ 1,747 Total interest expense ​ $ 16,896 ​ $ 13,850 ​ The accompanying notes are an integral part of these Consolidated Financial Statements ​ 64 Table of Contents Hallador Energy Company Consolidated Statements of Cash Flows For the years ended December 31, (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 CASH FLOWS FROM OPERATING ACTIVITIES: ​ ​ ​ ​ Net income (loss) ​ $ 41,871 ​ $ (226,138) Adjustments to reconcile net income (loss) to net cash provided by operating activities: ​ ​ ​ ​ Deferred income tax (benefit) ​ 1,833 ​ (9,235) Equity method investment loss ​ 450 ​ 746 Depreciation, depletion and amortization ​ 41,222 ​ 65,626 Asset impairment ​ ​ — ​ ​ 215,136 Loss on extinguishment of debt ​ 608 ​ 2,790 (Gain) loss on disposal or abandonment of assets, net ​ (2,489) ​ (50) Amortization of debt issuance costs ​ 1,993 ​ 1,747 Asset retirement obligations accretion ​ 1,764 ​ 1,628 Cash paid on asset retirement obligation reclamation ​ (727) ​ (1,407) Stock-based compensation ​ 3,529 ​ 4,454 Accretion on contract liabilities ​ ​ 8,408 ​ ​ 1,170 Amortization of contract liabilities ​ (99,683) ​ (70,203) Director fees paid in stock ​ ​ 192 ​ ​ 150 Change in current assets and liabilities: ​ ​ ​ ​ Accounts receivable ​ 1,449 ​ 4,499 Inventory ​ (5,849) ​ (13,610) Parts and supplies ​ (6,750) ​ (227) Prepaid expenses ​ 1,910 ​ 784 Accounts payable and accrued liabilities ​ (2,154) ​ (14,580) Contract liabilities ​ 93,613 ​ 102,011 Other ​ (56) ​ 643 Net cash provided by operating activities ​ $ 81,134 ​ $ 65,934 CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ ​ ​ Capital expenditures ​ $ (69,215) ​ $ (53,367) Proceeds from sale of equipment ​ 3,158 ​ 4,239 Proceeds from held-for-sale assets ​ ​ — ​ ​ 3,200 Investment in equity method investments ​ ​ (490) ​ ​ (542) Net cash used in investing activities ​ $ (66,547) ​ $ (46,470) CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ ​ Payments on bank debt ​ $ (106,000) ​ $ (147,000) Borrowings of bank debt ​ 92,000 ​ 99,500 Payments on lease financing ​ ​ (6,994) ​ ​ (5,633) Proceeds from sale and leaseback arrangement ​ — ​ 5,134 Issuance of related party notes payable ​ — ​ 5,000 Payments on related party notes payable ​ — ​ (5,000) Debt issuance costs ​ (330) ​ (673) ATM offering ​ 13,510 ​ 34,515 Taxes paid on vesting of RSUs ​ (3,554) ​ (277) Net cash used in financing activities ​ $ (11,368) ​ $ (14,434) Increase in cash, cash equivalents, and restricted cash ​ 3,219 ​ 5,030 Cash, cash equivalents, and restricted cash, beginning of year ​ 12,153 ​ 7,123 Cash, cash equivalents, and restricted cash, end of year ​ $ 15,372 ​ $ 12,153 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: ​ ​ ​ ​ Cash and cash equivalents ​ $ 10,070 ​ $ 7,232 Restricted cash ​ 5,302 ​ 4,921 ​ ​ $ 15,372 ​ $ 12,153 SUPPLEMENTAL CASH FLOW DISCLOSURES: ​ ​ ​ ​ Cash paid for interest ​ $ 6,705 ​ $ 10,511 Non-cash change in capital expenditures related to accounts payable and prepaid expenses ​ $ 7,232 ​ $ 356 Stock issued on redemption of convertible notes and interest ​ $ — ​ $ 22,993 ​ ​ The accompanying notes are an integral part of these Consolidated Financial Statements ​ 65 Table of Contents Hallador Energy Company Consolidated Statement of Stockholders’ Equity (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Retained ​ Total ​ ​ Common Stock Issued ​ Paid-in ​ Earnings ​ Stockholders’ ​ ​ ​ ​ Shares ​ ​ ​ Amount ​ ​ ​ Capital ​ ​ ​ (Deficit) ​ Equity BALANCE, DECEMBER 31, 2023 34,052 ​ $ 341 ​ $ 127,548 ​ $ 140,699 ​ $ 268,588 Stock-based compensation — ​ — ​ 4,454 ​ — ​ 4,454 Stock issued on vesting of RSUs 380 ​ 4 ​ (4) ​ — ​ — Taxes paid on vesting of RSUs (159) ​ (2) ​ (275) ​ — ​ (277) Stock issued on redemption of convertible notes 3,672 ​ 36 ​ 22,957 ​ — ​ 22,993 Stock issued in ATM offering ​ 4,655 ​ ​ 47 ​ ​ 34,468 ​ ​ — ​ ​ 34,515 Stock issued for director fees ​ 21 ​ ​ — ​ ​ 150 ​ ​ — ​ ​ 150 Net loss — ​ — ​ — ​ (226,138) ​ (226,138) BALANCE, DECEMBER 31, 2024 42,621 ​ $ 426 ​ $ 189,298 ​ $ (85,439) ​ $ 104,285 Stock-based compensation — ​ — ​ 3,529 ​ — ​ 3,529 Stock issued on vesting of RSUs 733 ​ 7 ​ (7) ​ — ​ — Taxes paid on vesting of RSUs (244) ​ (2) ​ (3,552) ​ — ​ (3,554) Stock issued in ATM offering ​ 697 ​ ​ 7 ​ ​ 13,503 ​ ​ ​ ​ ​ 13,510 Stock issued for director fees ​ 10 ​ ​ ​ ​ ​ 192 ​ ​ ​ ​ ​ 192 Net income — ​ — ​ — ​ 41,871 ​ 41,871 BALANCE, DECEMBER 31, 2025 43,817 ​ $ 438 ​ $ 202,963 ​ $ (43,568) ​ $ 159,833 ​ The accompanying notes are an integral part of these Consolidated Financial Statements ​ 66 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation Hallador Energy Company (“Hallador” or the “Company”) is a vertically integrated, independent power producer (“IPP”) and fuel company with operations primarily in Indiana.
Electric operations We concluded that for a Power Purchase Agreement (“PPA”) that is not determined to be a lease or derivative, the definition of a contract and the criteria in ASC 606, Revenue from Contracts with Customers (“ASC 606”), is met at the time a PPA is executed by the parties, as this is the point at which enforceable rights and obligations are established.
Electric operations We concluded that for a Power Purchase Agreement (“PPA”) that is not determined to be a lease or derivative, the definition of a contract and the criteria in ASC 606, Revenue from Contracts with Customers (“ASC 606”), is met at the time the PPA is executed by the parties, as this is the point at which enforceable rights and obligations are established.
The Company utilized an estimated market participant discount rate of 11.5% and assumed production that is consistent with our current mining plans and reserve estimates that equate to approximately 3.6 million tons per year until all reserves are produced as part of the analysis.
The Company utilized an estimated market participant discount rate of 11.5% and assumed production that is consistent with our mining plans and reserve estimates that equate to approximately 3.6 million tons per year until all reserves are produced as part of the analysis.
As part of that analysis, the Company determined the carrying amount of its coal mining long-lived asset group was not recoverable and recorded a non-cash, long-lived asset impairment charge of $215.1 million in 2024. See “ Note 19 – Impairment of Coal Properties ” below related to our 2024 impairment.
As part of that analysis, the Company determined the carrying amount of its coal mining long-lived asset group was not recoverable and recorded a non-cash, long-lived asset impairment of $215.1 million in 2024. See “ Note 19 – Impairment of Coal Properties ” below related to our 2024 impairment.
The discounted cash flow model was calculated using projected economics for the Coal Operations assets, using the Company’s mining plan and reserve estimates to be mined and sold at prevailing commodity prices, operating expenses, and production cost levels, which are classified as Level 3 inputs.
The discounted cash flow model was calculated using projected economics for our Coal Operations assets, using the Company’s mining plan and reserve estimates to be mined and sold at prevailing commodity prices, operating expenses, and production cost levels, which are classified as Level 3 inputs.
On September 27, 2024, the Company executed the First Amendment (“First Amendment”) to the Fourth Amended and Restated Credit Agreement, dated as of August 2, 2023 (as amended, the “Credit Agreement”), with PNC which was accounted for as a debt modification.
On September 27, 2024, the Company executed the First Amendment (“First Amendment”) to the Fourth Amended and Restated Credit Agreement, dated as of August 2, 2023 (as amended, the “Credit Agreement”), with PNC Bank, which was accounted for as a debt modification.
Net Income per Share Basic earnings per share (“EPS”) are computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted EPS attributable to common shareholders is computed by adjusting net earnings by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period.
Earnings per Share Basic earnings per share (“EPS”) are computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted EPS attributable to common shareholders is computed by adjusting net earnings by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period.
We have operating leases for office space with remaining lease terms ranging from one month to approximately eight years. As most of the leases do not provide an implicit rate, we calculate the ROU assets and lease liabilities using our secured incremental borrowing rate at the lease commencement date.
We have operating leases for office space with remaining lease terms ranging from one month to approximately seven years. As most of the leases do not provide an implicit rate, we calculate the ROU assets and lease liabilities using our secured incremental borrowing rate at the lease commencement date.
See “ Note 19 – Impairment of Coal Properties” for additional changes to the Company’s mining plans that occurred during the fourth quarter of 2024. (18) AT MARKET AGREEMENT On December 18, 2023, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc.
See “ Note 19 – Impairment of Coal Properties ” for additional changes to the Company’s mining plans that occurred during the fourth quarter of 2024. (18) AT MARKET AGREEMENT On December 18, 2023, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc.
Additionally, EBITDA margin provides investors with the financial analytical framework upon which our CODM bases financial, operational, compensation and planning decisions and presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations.
Additionally, Segment EBITDA provides investors with the financial analytical framework upon which our CODM bases financial, operational, compensation and planning decisions and presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations.
These levels are: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We consider active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
These levels are: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We consider active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. We have no Level 1 instruments.
We had deferred financing fees of $0.2 million and $0.1 million at December 31, 2024 and 2023, respectively, in connection with entry into the finance leases.
We had deferred financing fees of $0.1 million and $0.2 million at December 31, 2025 and 2024, respectively, in connection with entry into the finance leases.
Deferred tax assets and liabilities are recognized for the future expected tax consequences of temporary differences between income tax and financial reporting and principally relate to differences in the tax basis of assets and liabilities and their reported amounts, using enacted tax rates in effect for the year in which differences are expected to reverse.
Deferred tax assets and liabilities are recognized for the future expected tax consequences of temporary differences between income tax and financial reporting and principally relate to differences in the tax basis of 70 Table of Contents assets and liabilities and their reported amounts, using enacted tax rates in effect for the year in which differences are expected to reverse.
Plant Equipment and Mining Properties The values of our Hallador Power property, plant and equipment were initially recorded at relative fair value based on the consideration paid upon closing of the acquisition of Merom in 2022. Other equipment is recorded at cost. Expenditures that extend the useful lives or increase the productivity of the assets are capitalized.
Property, Plant and Equipment The values of our Hallador Power’s property, plant and equipment were initially recorded at relative fair value based on the consideration paid upon closing of the acquisition of Merom in 2022. Other equipment is recorded at cost. Expenditures that extend the useful lives or increase the productivity of the assets are capitalized.
With coal quality specifications in place, the raw coal sold by us to the customer at the delivery point must be substantially free of magnetic material and other foreign material impurities and crushed to a maximum size as set forth in the respective coal sales agreement.
Coal sales agreements will typically contain coal quality specifications. With coal quality specifications in place, the raw coal sold by us to the customer at the delivery point must be substantially free of magnetic material and other foreign material impurities and crushed to a maximum size as set forth in the respective coal sales agreement.
The Company did not record an impairment during the year ended December 31, 2023. 90 Table of Contents (20) SEGMENTS OF BUSINESS Our business is organized based on the services and products we provide in two segments: (i) Electric Operations and (ii) Coal Operations.
The Company did not record an impairment during the year ended December 31, 2025. ​ ​ ​ 86 Table of Contents (20) SEGMENTS OF BUSINESS Our business is organized based on the services and products we provide in two segments: (i) Electric Operations and (ii) Coal Operations.
Our sales region is in MISO Zone 6, which includes Indiana and a portion of western Kentucky. Revenues from our Electric Operations segment consist primarily of delivered energy and capacity revenues.
Our sales region is in MISO Zone 6, which includes Indiana and a portion of western Kentucky. Revenue from our Electric Operations segment consist primarily of delivered energy and accredited capacity revenue.
There were no long-lived asset impairments during the year ended December 31, 2023. Mine Development Costs of developing new mines, including asset retirement obligation assets, or significantly expanding the capacity of existing mines, are capitalized and amortized using the units-of-production method over estimated recoverable reserves.
There were no long-lived asset impairments during the year ended December 31, 2025. Mine Development Costs of developing new mines, including ARO assets, or significantly expanding the capacity of existing mines, are capitalized and amortized using the units-of-production method over estimated recoverable reserves.
As such, at the conclusion of the Company’s annual business plan review during the fourth quarter of 2024, it decided to temporarily seal the Oaktown 2 mine, and to focus coal production at the Oaktown 1 mine, which has lower recovery costs.
As such, at the conclusion of the Company’s annual business plan review in 2024, it decided to temporarily seal the Oaktown 2 mine, and to focus coal production at the Oaktown 1 mine, which has lower recovery costs.
As a result of determining the effect of potentially dilutive securities, in certain periods, diluted net loss per share is the same as the basic net loss per share for the periods presented.
As a result of determining the effect of potentially dilutive securities, in certain periods, diluted net loss per share may be the same as the basic net loss per share for the periods presented.
Cash balances at individual banks may exceed the federally insured limit by the Federal Deposit Insurance Corporation. The Company has not experienced any material losses in such accounts. Restricted Cash Restricted cash represents cash held by third parties primarily for future workers’ compensation claims and MISO escrow payments.
Cash balances at individual banks may exceed the federally insured limit by the Federal Deposit Insurance Corporation. The Company has not historically experienced any losses in such accounts. Restricted Cash Restricted cash represents cash held by third parties primarily for future workers’ compensation claims and Midcontinent Independent System Operator’s ("MISO") escrow payments.
Potential common shares include shares of restricted stock units as if the units issued by us were vested and convertible debt. We apply the treasury stock method to account for the dilutive impact of its restricted stock units and the if converted method for its convertible notes. Anti-dilutive securities are excluded from diluted EPS.
Potential common shares include shares of restricted stock units as if the units issued by us were vested. We apply the treasury stock method to account for the dilutive impact of its restricted stock units. Anti-dilutive securities are excluded from diluted EPS.
The Coal Operations reportable segment includes our currently operating underground mining complex Oaktown 1 among other mining complexes and locations which operated throughout the year ended December 31, 2023 and were subsequently idled during the year ended December 31, 2024. Reclassifications Amounts in the prior years consolidated financial statements are reclassified whenever necessary to conform to the current year’s presentation.
The Coal Operations reportable segment includes our currently operating underground mining complex Oaktown 1 among other mining complexes and locations most of which were idled during the year ended December 31, 2024. Reclassifications Amounts in the prior year’s consolidated financial statements are reclassified whenever necessary to conform to the current year’s presentation.
Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires us 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 financial statements, and the reported amounts of revenue and expenses during the reporting period.
Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires us 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 financial statements, and the reported amounts of revenue and expenses during the reporting period.
Contract Balances Under ASC 606, the timing of when a performance obligation is satisfied can affect the presentation of accounts receivable, contract assets, and contract liabilities. The main distinction between accounts receivable and contract assets is whether consideration is conditional on something other than the passage of time.
Contract Balances Under ASC 606, the timing of when a performance obligation is satisfied can affect the presentation of accounts receivable, contract assets and contract liabilities. The main distinction between accounts receivable and contract assets is whether consideration is conditional on something other than the passage of time. A receivable is an entity’s right to consideration that is unconditional.
Depreciation on our finance lease assets was $5.2 million and $2.3 million for the years ended December 31, 2024 and 2023, respectively. Interest expense on our finance lease liability was $1.5 million during the year ended December 31, 2024. Imputed interest expense on our future remaining finance lease liability was $1.7 million for the year ended December 31, 2024.
Depreciation on our finance lease assets was $2.0 million and $5.2 million for the years ended December 31, 2025 and 2024, respectively. Interest expense on our finance lease liability was $0.1 million during the year ended December 31, 2025. Imputed interest expense on our future remaining finance lease liability was $0.5 million for the year ended December 31, 2025.
No charges for credit losses were recognized during the years ended December 31, 2024 or 2023. Inventory and Parts and Supplies Inventory and parts and supplies are valued at the lower of cost or net realizable value determined using the first-in first-out method.
No charges for credit losses were recognized during the years ended December 31, 2025 or 2024. Inventory and Parts and Supplies Coal inventory is valued at the lower of cost or net realizable value (“NRV”) determined using the first-in first-out method.
Accordingly, we concluded that a PPA that is not determined to be a lease or derivative constitutes a valid contract under ASC 606. We recognize revenue daily, based on an output method of capacity made available as part of any stand-ready obligations for contract capacity performance obligations and daily, based on an output method of MWh of electricity delivered.
Accordingly, we concluded that a PPA that is not determined to be a lease or derivative constitutes a valid contract under ASC 606. 74 Table of Contents Under PPAs we recognize revenue daily, based on an output method of capacity made available as part of any stand-ready obligations for contracted accredited capacity performance obligations and daily, based on an output method of megawatt hour (“MWh”) of electricity delivered.
The carrying value of the investment included in the consolidated balance sheets as of December 31, 2024 and 2023 was $2.1 million and $2.8 million, respectively. The Company also owns a 50% interest in Oaktown Gas, LLC.
The carrying value of the investment included in the consolidated balance sheets as of December 31, 2025 and 2024, was $1.9 million and $2.1 million, respectively. 84 Table of Contents The Company also owns a 50% interest in Oaktown Gas, LLC.
Customers are invoiced as power is delivered or as coal is shipped or at periodic intervals in accordance with contractual terms. Coal invoices typically include customary adjustments for the resolution of price variability, such as coal quality thresholds. Payments are generally received within thirty days of invoicing. Historically, credit losses have been insignificant.
Customers are invoiced at periodic intervals in accordance with contractual terms for delivered energy and accredited capacity. Coal customers are invoiced upon shipment. Coal invoices typically include customary adjustments for the resolution of price variability, such as coal quality thresholds. Payments are generally received within thirty days of invoicing. Historically, credit losses have been insignificant.
Our CODM reviews variable costs, as defined above, in our Electric Operations segment in order to evaluate the efficiency of that segments operations. ​ 91 Table of Contents Presented below are the Electric and Coal Operations key metrics reviewed by the CODM at December 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Electric Operations ​ ​ Coal Operations ​ ​ ​ ​ ​ ​ ​ ​ Delivered Energy $ 203,434 Coal Sales $ 202,525 Capacity Revenue ​ ​ 58,093 ​ ​ ​ ​ Electric Sales ​ $ 261,527 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fuel ​ $ (111,768) ​ ​ ​ ​ Other Operating Costs (1) ​ ​ (19) ​ ​ ​ ​ Total Variable Costs ​ $ (111,787) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Operating and Maintenance Costs (2) ​ $ (28,622) ​ Fuel $ (2,851) Cost of Purchased Power ​ ​ (10,888) ​ Other Operating and Maintenance Costs ​ (89,283) Utilities ​ ​ (2,070) ​ Utilities ​ (13,844) Labor ​ ​ (30,842) ​ Labor ​ (85,322) Power Margin Without General and Administrative ​ ​ 77,318 ​ Coal Margin Without General and Administrative ​ 11,225 General and Administrative ​ ​ (5,311) ​ General and Administrative ​ (9,877) Electric Operations — EBITDA Margin ​ $ 72,007 ​ Coal Operations — EBITDA Margin $ 1,348 ​ ​ ​ ​ ​ ​ ​ ​ (1) Other operating costs include costs for limestone, dibasic acid, ammonia, lime dust and soda ash.
Presented below are the Electric and Coal Operations key metrics reviewed by the CODM at December 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Electric Operations ​ ​ Coal Operations ​ ​ ​ ​ ​ ​ ​ ​ Delivered energy ​ $ 203,434 ​ Coal sales $ 202,525 Accredited capacity revenue ​ ​ 58,093 ​ ​ ​ ​ Electric sales ​ $ 261,527 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fuel ​ $ (111,768) ​ ​ ​ ​ Other operating costs (1) ​ ​ (19) ​ ​ ​ ​ Total variable costs ​ $ (111,787) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other operating and maintenance costs (2) ​ $ (28,622) ​ Fuel $ (2,851) Cost of purchased power ​ ​ (10,888) ​ Other operating and maintenance costs ​ (89,283) Utilities ​ ​ (2,070) ​ Utilities ​ (13,844) Labor ​ ​ (30,842) ​ Labor ​ (85,322) Power margin without general and administrative ​ ​ 77,318 ​ Coal margin without general and administrative ​ 11,225 General and administrative ​ ​ (5,311) ​ General and administrative ​ (9,877) Electric Operations — Segment EBITDA ​ $ 72,007 ​ Coal Operations — Segment EBITDA $ 1,348 ​ ​ ​ ​ ​ ​ ​ ​ (1) Other operating costs include costs for lime dust.
Stock-based Compensation Stock-based compensation for restricted stock units is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable vesting period of the stock award (generally two to four years) using the straight-line method.
Stock-based Compensation Stock-based compensation for restricted stock units is measured at the grant date based on the fair value of the award and is recognized as expense over the respective vesting period of the stock award using the straight-line method.
Workers’ compensation is based estimated claim liabilities and MISO escrow payments are based on power purchased or sold related to power demand and our power purchase agreements (“PPA”). Accounts Receivable The timing of revenue recognition, billings and cash collections results in accounts receivable from customers.
The amount restricted for workers’ compensation is based on estimated claim liabilities. The amount restricted for MISO escrow payments is based on power purchased or sold through the MISO interconnection and our power purchase agreements (“PPA”). Accounts Receivable The timing of revenue recognition, billings and cash collections results in accounts receivable from customers.
For our Electric Operations segment, EBITDA margin is comprised of delivered energy revenues less certain significant segment expenses, which include (i) variable costs, (ii) other operating and maintenance costs, (iii) costs of purchased power, (iv) utilities, (v) labor and (vi) general and administrative costs.
For our Electric Operations segment, Segment EBITDA is comprised of accredited capacity and delivered energy revenues less certain significant segment expenses, which include (i) variable costs comprised of fuel costs and certain other operating costs, such as limestone and soda ash, (ii) other operating and maintenance costs, (iii) costs of purchased power, (iv) utilities, (v) labor and (vi) general and administrative costs . 2.
(10) LEASES We determine if an arrangement is an operating or finance lease at the inception of each contract. If the contract is classified as an operating lease, we record a right-of-use (“ROU”) asset and corresponding liability reflecting the total remaining present value of fixed lease payments over the expected term of the lease agreement.
If the contract is classified as an operating lease, we record a right-of-use (“ROU”) asset and corresponding liability reflecting the total remaining present value of fixed lease payments over the expected term of the lease agreement.
As a result of the Company’s decision to temporarily seal the Oaktown 2 mine, the Company determined a triggering event had occurred. The Company then completed an impairment review to determine if the carrying value of its coal properties were impaired. The Company compared the net book value of its coal properties to estimated undiscounted future net cash flows.
As a result of the Company’s decision to temporarily seal the Oaktown 2 mine, the Company determined a triggering event had occurred in 2024. The Company then completed an impairment review to determine if the carrying value of its coal properties were impaired.
Other than land and most mining equipment, mining properties are depreciated using the units-of-production method over the estimated recoverable reserves. Most surface and underground mining equipment is depreciated using estimated useful lives ranging from three to fifteen years.
Mining properties are depreciated using the units-of-production method over the estimated recoverable reserves. Mining equipment and other plant and equipment assets are depreciated using the straight-line method over their estimated useful life. Most surface and underground mining equipment is depreciated using estimated useful lives ranging from one to fifteen years.
Under this program, we are responsible for the first $1.0 million per claim up to an aggregate of $4.0 million annually. Restricted cash of $3.4 million and $3.8 million as of December 31, 2024 and 2023, respectively, represents cash held and controlled by a third party and is restricted for future workers’ compensation claim payments.
Under this program, the Company is responsible for the first $1.0 million per claim up to an aggregate of $4.0 million annually. The Company has restricted cash of $5.3 million and $4.9 million as of December 31, 2025 and 2024, respectively, which represents cash held and controlled by third parties and is restricted primarily for future workers’ compensation claim payments.
Our debt is recorded at amortized cost, which approximates fair value due to the variable interest rates in the agreement and is collateralized primarily by our assets. Liquidity As of December 31, 2024, we had additional borrowing capacity of $30.6 million under the revolver and total liquidity of $37.8 million.
Our debt is recorded at amortized cost, which approximates fair value due to the variable interest rates in the agreement and is collateralized by substantially all our assets. Liquidity As of December 31, 2025, we had additional borrowing capacity of $28.8 million under the revolving credit facility and total liquidity of $38.8 million.
The Company had $4.3 million and $3.6 million of workers’ compensation reserve as of December 31, 2024 and 2023, respectively in “Accounts payable and accrued liabilities” on the Consolidated Balance Sheets.
The Company had $5.2 million and $4.3 million of workers’ compensation reserve as of December 31, 2025 and 2024, respectively, in accounts payable and accrued liabilities on the consolidated balance sheets.
Advanced Royalties Coal leases that require minimum annual or advance payments and are recoverable from future production are generally deferred and charged to expense as the coal is subsequently produced. Advance royalties are included in other assets.
Prepaid Expenses Prepaid expenses include prepaid insurance and other prepaid balances with vendors for various services paid in advance of use. Advanced Royalties Coal leases that require minimum annual or advance payments and are recoverable from future production are generally deferred and charged to expense as the coal is subsequently produced. Advance royalties are included in other assets.
This business plan review involves updates to its mining plans that take into account many factors, such as changes in market price trends, cost trends, expected demand trends, its latest engineering studies and current year operational and financial results. During the fourth quarter of 2024, the Company began its annual business plan review.
This business plan review involves updates to its mining plans that take into account many factors, such as changes in market price trends, cost trends, expected demand trends, its latest engineering studies and current year operational and financial results. There were no impairments recorded during the year ended December 31, 2025 in connection with the annual review.
Finance lease assets are included in finance lease right-of-use assets on the consolidated balance sheets and the associated finance lease liabilities are reflected within current portion of lease financing and long-term lease financing on the consolidated balance sheets as applicable.
We previously entered into finance lease arrangements that are accounted for as failed sale-leaseback transactions. Finance lease assets are included in finance lease right-of-use assets on the consolidated balance sheets and the associated finance lease liabilities are reflected within current portion of lease financing and long-term lease financing on the consolidated balance sheets as applicable.
The cost of maintenance and repairs that do not extend the useful lives or increase the productivity of the assets are expensed as 71 Table of Contents incurred. Most power plant equipment is depreciated over the remaining estimated useful life of the Merom at the time of equipment acquisition, or seven to nine years. Mining properties are recorded at cost.
The cost of maintenance and repairs that do not extend the useful lives or increase the productivity of the assets are expensed as incurred. Most power plant equipment is depreciated over the estimated useful life of the assets ranging from six to nine years.
Intercompany coal sales and amounts above actual costs to produce the coal are eliminated in the consolidated statements of operations. ​ In addition to these reportable segments, the Company has a “Corporate and Other and Eliminations” category, which is not significant enough, on a stand-alone basis, to be considered an operating segment.
In addition to these reportable segments, the Company has a “Corporate and Other and Eliminations” category, which is not significant enough, on a stand-alone basis, to be considered an operating segment.
We also concluded that the stand-ready obligation to be available to provide electricity is capable of being distinct as each unit of capacity provides an economic benefit to the holder and could be sold by the customer.
We also concluded that the stand-ready obligation to be available to provide electricity is capable of being distinct as each unit of accredited capacity provides an economic benefit to the holder and could be sold by the customer. 76 Table of Contents Coal Operations In most of our coal contracts, the customer contracts with us to provide coal that meets certain quality criteria.
In connection with the Reorganization Plan, we incurred aggregate expenses of $1.9 million ( $1.1 million in the first quarter of 2024 and $0.8 million in the second quarter of 2024) that were included in “Labor” in the consolidated statements of operations.
In connection with the Reorganization Plan, we incurred aggregate expenses of $1.9 million ( $1.1 million in the first quarter of 2024 and $0.8 million in the second quarter of 2024) that were included in labor in the consolidated statements of operations. These charges included compensation, tax, professional, and insurance related expenses and were considered non-recurring charges paid during 2024.
Significant inputs used to determine fair value include estimates of future cash flows from coal sales and minimum payments, an appropriate discount rate and the useful economic life.
As a result, the Company prepared a discounted cash flow model (Level 3 fair value measurement under the fair value hierarchy) to estimate fair value. Significant inputs used to determine fair value include estimates of future cash flows from coal sales and minimum payments, an appropriate discount rate and the useful economic life.
These deferred financing fees will be amortized on a straight-line basis over the term of the finance leases. 85 Table of Contents Information related to leases was as follows as of December 31st (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 ​ 2023 Operating lease information: ​ ​ ​ Operating cash outflows from operating leases ​ $ 169 ​ $ 208 ​ Weighted average remaining lease term in years ​ 8.0 ​ 8.5 ​ Weighted average discount rate ​ 9.5 % 9.5 % Finance lease information: ​ ​ ​ Financing cash outflows from finance leases ​ $ 5,633 ​ $ — ​ Proceeds from sale and leaseback arrangement ​ 5,134 ​ 11,082 ​ Weighted average remaining lease term in years ​ 2.18 ​ 3.00 ​ Weighted average discount rate ​ 9.0 % 8.5 % ​ We recognized the following costs related to our leases in our consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ For the Year Ended December 31, ​ ​ ​ 2024 2023 ​ ​ ​ ​ ​ (In thousands) ​ Operating lease assets ​ Buildings and equipment $ 664 ​ $ 712 Operating lease liabilities: ​ ​ Current operating lease liabilities ​ Accounts payable and accrued liabilities $ 99 ​ $ 58 Non-current operating lease liabilities ​ Other long-term liabilities ​ 565 ​ ​ 654 Total operating lease liability ​ ​ ​ $ 664 ​ $ 712 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance lease assets ​ Finance lease right-of-use assets ​ $ 13,034 ​ $ 12,346 ​ Finance lease liabilities: ​ ​ ​ ​ Current finance lease liabilities ​ Current portion of lease financing ​ $ 6,912 ​ $ 3,933 ​ Non-current finance lease liabilities ​ Long-term lease financing ​ ​ 8,749 ​ ​ 8,157 ​ Total finance lease liabilities ​ ​ ​ $ 15,661 ​ $ 12,090 ​ ​ Future minimum lease payments under non-cancellable leases as of December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Leases Finance Leases ​ ​ (In thousands) 2025 ​ $ 108 ​ $ 8,147 2026 ​ 121 ​ 7,972 2027 ​ 125 ​ 1,391 2028 ​ 129 ​ — 2029 ​ 133 ​ — Thereafter ​ 361 ​ — Total minimum lease payments ​ $ 977 ​ $ 17,510 Less imputed interest and deferred finance fees ​ (313) ​ (1,849) Total lease liability ​ $ 664 ​ $ 15,661 ​ ​ ​ ​ 86 Table of Contents (11) SELF INSURANCE We self-insure non-leased underground mining equipment.
Information related to leases was as follows as of December 31 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Operating lease information: ​ ​ ​ ​ ​ Operating cash outflows from operating leases ​ $ 207 ​ $ 169 ​ Weighted average remaining lease term in years ​ 6.6 ​ 8.0 ​ Weighted average discount rate ​ 8.2 % 9.5 % Finance lease information: ​ ​ ​ ​ ​ Financing cash outflows from finance leases ​ $ 6,994 ​ $ 5,633 ​ Proceeds from sale and leaseback arrangement ​ — ​ 5,134 ​ Weighted average remaining lease term in years ​ 1.22 ​ 2.18 ​ Weighted average discount rate ​ 9.0 % 9.0 % ​ We recognized the following costs related to our leases in our consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ For the Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ (In thousands) Operating lease assets ​ Buildings and equipment $ 646 ​ $ 664 Operating lease liabilities: ​ ​ ​ ​ ​ Current operating lease liabilities ​ Accounts payable and accrued liabilities $ 112 ​ $ 99 Non-current operating lease liabilities ​ Other long-term liabilities ​ 534 ​ ​ 565 Total operating lease liability ​ ​ ​ $ 646 ​ $ 664 ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance lease assets ​ Finance lease right-of-use assets ​ $ 12,591 ​ $ 13,034 Finance lease liabilities: ​ ​ ​ ​ ​ ​ Current finance lease liabilities ​ Current portion of lease financing ​ $ 7,411 ​ $ 6,912 Non-current finance lease liabilities ​ Long-term lease financing ​ ​ 1,338 ​ ​ 8,749 Total finance lease liabilities ​ ​ ​ $ 8,749 ​ $ 15,661 ​ 82 Table of Contents Future minimum lease payments under non-cancellable leases as of December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Leases ​ ​ ​ Finance Leases ​ ​ (In thousands) 2026 ​ $ 121 ​ $ 7,972 2027 ​ 125 ​ 1,391 2028 ​ 129 ​ — 2029 ​ 133 ​ — 2030 ​ 137 ​ — Thereafter ​ 224 ​ — Total minimum lease payments ​ $ 869 ​ $ 9,363 Less imputed interest and deferred finance fees ​ (223) ​ (614) Total lease liability ​ $ 646 ​ $ 8,749 ​ ​ ​ ​ (11) SELF INSURANCE The Company is self-insured for certain risks, including physical damage and operational liability, related to our non-leased underground mining equipment.
A receivable is an entity’s right to consideration that is unconditional. 81 Table of Contents Under the typical payment terms of our contracts with customers, the customer pays us a base price for the coal, increased or decreased for any quality adjustments, electricity, or capacity.
Under the typical payment terms of our contracts with customers, the customer pays us the contracted price for electricity or accredited capacity. For coal contracts, the customer pays us a base price for the coal, increased or decreased for any quality adjustments.
As of December 31, 2024, unrecognized stock compensation expense to be recognized over the remaining 3-year vesting period was $2.7 million, and we had 54,084 RSUs available for future issuance. RSUs are not allocated earnings and losses as they are considered non-participating securities. Forfeitures are recognized as they occur.
As of December 31, 2025, unrecognized stock compensation expense to be recognized over the respective vesting period was $4.1 million. RSUs are not allocated earnings and losses as they are considered non-participating securities. Forfeitures are recognized as they occur.
For our Coal Operations segment, EBITDA margin is comprised of coal sales less certain significant segment expenses, which include (i) fuel, (ii) other operating and maintenance costs, (iii) utilities, (iv) labor and (v) general and administrative costs. ​ EBITDA margin for each segment is a key measure used by our CODM and provides information about our core operating performance, significant expenses and ability to generate cash flow.
For our Coal Operations segment, Segment EBITDA is comprised of coal sales less certain significant segment expenses, which include (i) fuel, (ii) other operating and maintenance costs, (iii) utilities, (iv) labor and (v) general and administrative costs.
Unamortized bank fees as of December 31, 2024 and 2023, were $2.5 million and $3.6 million, respectively. 77 Table of Contents Bank debt, less debt issuance costs, is presented below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Current bank debt ​ $ 6,000 ​ $ 26,000 Less unamortized debt issuance cost ​ (1,905) ​ (1,562) Net current portion ​ $ 4,095 ​ $ 24,438 ​ ​ ​ ​ ​ ​ ​ Long-term bank debt ​ $ 38,000 ​ $ 65,500 Less unamortized debt issuance cost ​ (606) ​ (2,047) Net long-term portion ​ $ 37,394 ​ $ 63,453 ​ ​ ​ ​ ​ ​ ​ Total bank debt ​ $ 44,000 ​ $ 91,500 Less total unamortized debt issuance cost ​ (2,511) ​ (3,609) Net bank debt ​ $ 41,489 ​ $ 87,891 ​ Covenants The First Amendment, among other things, provided the Company with short-term covenant relief to pursue additional liquidity.
Bank debt, less debt issuance costs, is presented below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2025 ​ ​ ​ 2024 Current bank debt ​ $ — ​ $ 6,000 Less unamortized debt issuance cost ​ — ​ (1,905) Net current portion ​ $ — ​ $ 4,095 ​ ​ ​ ​ ​ ​ ​ Long-term bank debt ​ $ 30,000 ​ $ 38,000 Less unamortized debt issuance cost ​ (322) ​ (606) Net long-term portion ​ $ 29,678 ​ $ 37,394 ​ ​ ​ ​ ​ ​ ​ Total bank debt ​ $ 30,000 ​ $ 44,000 Less total unamortized debt issuance cost ​ (322) ​ (2,511) Net bank debt ​ $ 29,678 ​ $ 41,489 ​ Covenants The First Amendment, among other things, provided the Company with short-term covenant relief to pursue additional liquidity.
Inventory costs include labor, supplies, operating overhead, and other related costs incurred at or on behalf of the mining location or plant, including depreciation, depletion, and amortization of equipment, buildings, mineral rights, and mine development costs.
Coal inventory costs include labor, supplies, operating overhead, and other related costs incurred at or on behalf of the mining location or plant, including depreciation, depletion, and amortization of equipment, buildings, mineral rights, and mine development costs. Parts and supplies inventory is stated at cost basis determined using the first-in first-out method, less a reserve for surplus and obsolescence.
The Company uses the credit-adjusted risk-free discount rates ranging from 7% to 10% to discount the obligation, inflation rates anticipated during the time to reclamation, and cost estimates prepared by its engineers inclusive of market risk premiums. Federal and state laws require that mines be reclaimed in accordance with specific standards and approved reclamation plans, as outlined in mining permits.
The Company uses the credit-adjusted risk-free discount rates ranging from 7% to 10% to discount the obligation, inflation rates anticipated during the time to reclamation, and cost estimates prepared by its engineers inclusive of market risk premiums.
(12) NET INCOME (LOSS) PER SHARE The following table (in thousands, except per share amounts) sets forth the computation of basic earnings per share for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 Basic earnings per common share: ​ ​ Net income (loss) - basic ​ $ (226,138) ​ $ 44,793 Weighted average shares outstanding - basic ​ 39,504 ​ 33,133 Basic earnings (loss) per common share ​ $ (5.72) ​ $ 1.35 ​ The following table (in thousands, except per share amounts) sets forth the computation of diluted net income (loss) per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 Diluted earnings per common share: ​ ​ Net income (loss) - basic ​ $ (226,138) ​ $ 44,793 Add: Convertible Notes interest expense, net of tax ​ — ​ 1,201 Net income (loss) - diluted ​ $ (226,138) ​ $ 45,994 ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - basic ​ 39,504 ​ 33,133 Add: Dilutive effects of if converted Convertible Notes ​ — ​ 3,164 Add: Dilutive effects of Restricted Stock Units ​ — ​ 530 Weighted average shares outstanding - diluted ​ 39,504 ​ 36,827 ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share ​ $ (5.72) ​ $ 1.25 ​ ​ ​ ​ (13) FAIR VALUE MEASUREMENTS We account for certain assets and liabilities at fair value.
(12) NET INCOME (LOSS) PER SHARE The following table (in thousands, except per share amounts) sets forth the computation of basic earnings per share for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 Basic earnings per common share: ​ ​ ​ ​ Net income (loss) - basic ​ $ 41,871 ​ $ (226,138) Weighted average shares outstanding - basic ​ 42,932 ​ 39,504 Basic earnings (loss) per common share ​ $ 0.98 ​ $ (5.72) The following table (in thousands, except per share amounts) sets forth the computation of diluted net income (loss) per share: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 Diluted earnings per common share: ​ ​ ​ ​ Net income (loss) - diluted ​ $ 41,871 ​ $ (226,138) ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - basic ​ 42,932 ​ 39,504 Add: Dilutive effects of Restricted Stock Units ​ 500 ​ — Weighted average shares outstanding - diluted ​ 43,432 ​ 39,504 ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share ​ $ 0.96 ​ $ (5.72) ​ ​ ​ 83 Table of Contents ​ (13) FAIR VALUE MEASUREMENTS We account for certain assets and liabilities at fair value.
The Company recorded a $1.7 million gain in “(Gain) loss on disposal or abandonment of assets, net” in its consolidated statements of operations. ​ (22) CONTINGENCIES Our Coal Operations subsidiary is party to litigation in which the plaintiffs allege violations of the Fair Labor Standards Act and state law due to alleged failure to compensate for time "donning" and "doffing" equipment and to account for certain bonuses in the calculation of overtime rates and pay.
(22) CONTINGENCIES During 2024, our Coal Operations subsidiary was party to litigation in which the plaintiff’s alleged violations of the Fair Labor Standards Act and state law due to alleged failure to compensate for time "donning" and "doffing" equipment and to account for certain bonuses in the calculation of overtime rates and pay.
Segment Information Our business is organized based on the services and products we provide in two segments: (i) Electric Operations and (ii) Coal Operations.
Segment Information Our business is organized based on the services and products we provide in two segments: (i) Electric Operations and (ii) Coal Operations. The Chief Operating Decision Maker (“CODM”), who is the Company’s Chief Executive Officer, reviews and assesses operating performance measures related to our Electric Operations and our Coal Operations segments.
The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.
The update is intended to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions.
The core hole samples at the Oaktown 2 mine were of a lower quality and density than that of the Oaktown 1 mine.
In 2024, the Company evaluated core hole samples at several of its mines, reviewing the quality of the mine seam and density of the coal. The core hole samples at the Oaktown 2 mine were of a lower quality and density than those of the Oaktown 1 mine.
We have no Level 1 instruments. 87 Table of Contents Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. See asset impairment discussion below in Nonrecurring Fair Value Measurements sections below.
Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Under our RSU plan, participants are allowed to relinquish shares to pay for their required statutory income taxes. The outstanding RSUs have a value of $8.9 million based on the March 10, 2025 closing stock price of $8.60. For the years ended December 31, 2024 and 2023, stock-based compensation was $4.5 million and $3.6 million, respectively.
Under our RSU plan, participants are allowed to relinquish shares to pay for their required statutory income taxes. Stock-based compensation expense is included in labor and in general and administrative in the consolidated statements of operations. For the years ended December 31, 2025 and 2024, stock-based compensation expense was $3.5 million and $4.5 million, respectively.
We have concluded that the likelihood is remote that the ultimate resolution of any pending litigation or pending claims will be material or have a material adverse effect on our business, financial position, results of operations or liquidity. See “Note 22 – Contingencies” related to our decision to settle certain litigation in February of 2025.
We have concluded that the likelihood is remote that the ultimate resolution of any pending litigation or pending claims will be material or have a material adverse effect on our business, financial position, results of operations or liquidity. Fuel Costs Fuel costs in our Electric Operations include coal purchased from Sunrise Coal and third parties to operate Merom.
Fuel Costs Fuel costs in our Electric Operations include coal purchased from Sunrise Coal and third parties to operate Merom. Fuel costs in our Coal Operations include mainly diesel, as well as natural gas and petroleum to operate our coal mines. These fuel costs are expensed as the fuel is used.
Fuel costs in our Coal Operations include mainly diesel, as well as natural gas and petroleum to operate our coal mines. These fuel costs are expensed as the fuel is used. The difference between Sunrise Coal’s cost to produce coal and the contracted sales price to Hallador Power is eliminated in consolidation.
During December 2023, we issued 794,000 shares of Common Stock under the ATM Program for net proceeds of $7.3 million. During the year ended December 31, 2024, we issued 4,654,430 shares of Common Stock under the ATM Program for net proceeds of $34.5 million.
During the year ended December 31, 2024, we issued 4,654,430 shares of Common Stock under the ATM Program for net proceeds of $34.5 million. In January 2026, the Company delivered written notice to the Agent to terminate the Sales Agreement effective January 18, 2026.
(19) IMPAIRMENT OF COAL PROPERTIES Annually, the Company reviews its business plans for the next several years, with specific emphasis on the upcoming year.
As a result of the termination of the Sales Agreement, the Company will not offer or sell any further shares under the ATM Program. (19) IMPAIRMENT OF COAL PROPERTIES Annually, the Company reviews its business plans for the next several years, with specific emphasis on the upcoming year.
During 2023 we recognized a loss on extinguishment of debt of $1.5 million for the write-off of unamortized loan fees related to the August 2 nd Amendment to our credit agreement, which was accounted for as a debt extinguishment. The remaining costs were deferred and are being amortized over the term of the loan.
These unamortized bank fees were deferred and are being amortized over the term of the Credit Agreement. 72 Table of Contents During 2025, we recognized a loss on extinguishment of debt of $0.6 million for the write-off of unamortized loan fees related to the Term Loan which was paid off in the fourth quarter of 2025.
Our additional borrowing capacity is net of $19.4 million in outstanding letters of credit as of December 31, 2024 that were required to maintain surety bonds. Liquidity consists of additional borrowing capacity and cash and cash equivalents. Fees Unamortized bank fees and other costs incurred in connection with our initial facility totaled $4.3 million.
Our additional borrowing capacity is net of $16.2 million in outstanding letters of credit as of December 31, 2025 that were required to maintain surety bonds or related to PPAs. Liquidity consists of additional borrowing capacity and cash and cash equivalents.
Stock Options We have no stock options outstanding. 84 Table of Contents (9) EMPLOYEE BENEFITS Our employee benefit expenses for the years ended December 31st are below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Health benefits, including premiums ​ $ 13,796 ​ $ 18,483 401(k) matching ​ 1,851 ​ 2,910 Deferred bonus plan ​ 553 ​ 687 Total ​ $ 16,200 ​ $ 22,080 ​ Of the amounts in the above table, $15.2 million and $21.5 million are recorded in “ labor ” in the consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively, with the remainder in general and administrative.
(9) EMPLOYEE BENEFITS Our employee benefit expenses for the years ended December 31 are below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Health benefits, including premiums ​ $ 11,326 ​ $ 13,796 401(k) matching ​ 1,957 ​ 1,851 Deferred bonus plan ​ 770 ​ 553 Total ​ $ 14,053 ​ $ 16,200 ​ Of the amounts in the above table, $13.2 million and $15.2 million are recorded in labor in the consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively, with the remainder in general and administrative. 81 Table of Contents (10) LEASES The Company determines if an arrangement is an operating or finance lease at the inception of each contract.
(14) EQUITY METHOD INVESTMENTS We own a 50% interest in Sunrise Energy, which owns gas reserves and gathering equipment with plans to develop and operate such reserves. Sunrise Energy also plans to develop and explore for oil, natural gas, and coal-bed methane gas reserves on or near our underground coal reserves.
Sunrise Energy also plans to develop and explore for oil, natural gas, and coal-bed methane gas reserves on or near our underground coal reserves.
(17) ORGANIZATIONAL RESTRUCTURING On February 23, 2024, (the “Effective Date”), we committed to a reorganization effort in the Coal Operations Segment (the “Reorganization Plan”) that included a workforce reduction of approximately 110 employees, or approximately 12 % of the workforce. The reduction in workforce was communicated to employees on the Effective Date and implemented immediately, subject to certain administrative procedures.
The related party notes were paid off in June 2024 with proceeds from the prepaid physically delivered power contract. (17) ORGANIZATIONAL RESTRUCTURING On February 23, 2024, (the “Effective Date”), we committed to a reorganization effort in the Coal Operations Segment (the “Reorganization Plan”) that included a workforce reduction of approximately 110 employees, or approximately 12 % of the workforce.
We consider each ton of coal a separate performance obligation and allocate the transaction price based on the base price per the contract, increased or decreased for quality adjustments. We recognize revenue at a point in time as the customer does not have control over the asset at any point during the fulfillment of the contract.
We consider each ton of coal a separate performance obligation and allocate the transaction price using the base price per the contract, increased or decreased for quality adjustments.
The result of this undiscounted cash flow test indicated the carrying amount of its coal properties may not be recoverable. As a result, the Company prepared a discounted cash flow model (Level 3 fair value measurement under the fair value hierarchy) to estimate fair value.
The Company compared the net book value of its coal properties to estimated undiscounted future net cash flows. The result of this undiscounted cash flow test indicated the carrying amount of its coal properties may not be recoverable.
Corporate and Other and Eliminations primarily consist of unallocated corporate costs and activities, including a 50% interest in Sunrise Energy, LLC (“Sunrise Energy”), a private gas exploration company with operations in Indiana and Oaktown Gas, LLC, which we account for using the equity method. ​ During the fourth quarter of 2024, we sold our held-for-sale wholly-owned subsidiary Summit Terminal LLC, a logistics transport facility located on the Ohio River.
Corporate and Other and Eliminations primarily consist of unallocated corporate costs and activities, including our 50% interests in Sunrise Energy, LLC (“Sunrise Energy”), a private gas exploration company with operations in Indiana and Oaktown Gas, LLC, which we account for using the equity method. The Electric Operations reportable segment includes electric power generation facilities of the Merom Power Plant (“Merom”).
In the event the Company is not able to perform reclamation, it has surety bonds at December 31, 2024 totaling $30.8 million to cover ARO.
The Company reviews its ARO at least annually and reflects revisions for permit changes, changes in estimated reclamation costs and changes in the estimated timing of such costs. In the event the Company is not able to perform reclamation, it has surety bonds at December 31, 2025 totaling $30.9 million to cover ARO.
As part of this initiative, we substantially idled production at our higher cost surface mines, Prosperity Mine, and Freelandville Mine, with minimal ongoing production. We also focused our seven units of underground equipment on four units of our lowest cost production at our Oaktown Mine.
We also focused our seven units of underground equipment on four units of our lowest cost production at our Oaktown Mine.
As of December 31, 2024, we were paying SOFR plus 5.00% on the outstanding bank debt which equates to an all-in rate of 9.48%. ​ ​ ​ ​ ​ Future Maturities (in thousands): ​ 2025 $ 6,000 2026 ​ 38,000 2027 ​ — Total ​ $ 44,000 ​ ​ ​ 78 Table of Contents (5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (IN THOUSANDS) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Accounts payable $ 24,291 $ 43,636 Accrued property taxes ​ 4,185 ​ 2,987 Accrued payroll ​ 3,258 ​ 6,575 Workers' compensation reserve ​ 4,321 ​ 3,629 Group health insurance ​ 1,700 ​ 2,300 Asset retirement obligation - current portion ​ 1,952 ​ 2,150 Other ​ 4,591 ​ 1,631 Total accounts payable and accrued liabilities ​ $ 44,298 ​ $ 62,908 ​ ​ ​ (6) REVENUE Revenue from Contracts with Customers We account for a contract with a customer when the parties have approved the contract and are committed to performing their respective obligations, the rights of each party are identified, payment terms are identified, the contract has commercial substance, and it is probable substantially all of the consideration will be collected.
Liquidity at December 31, 2025, excludes the availability under the New Credit Facility. ​ ​ ​ ​ (5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (IN THOUSANDS) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2025 ​ ​ ​ 2024 Accounts payable ​ $ 12,594 ​ $ 12,822 Accrued liabilities ​ ​ 10,829 ​ ​ 11,469 Workers' compensation reserve ​ 5,223 ​ 4,321 Accrued property taxes ​ 3,900 ​ 4,185 Accrued payroll ​ 3,037 ​ 3,258 Asset retirement obligation - current portion ​ 2,606 ​ 1,853 Group health insurance ​ 1,420 ​ 1,700 Other ​ ​ 2,239 ​ ​ 4,690 Total accounts payable and accrued liabilities ​ $ 41,848 ​ $ 44,298 ​ ​ ​ (6) REVENUE Revenue from Contracts with Customers We account for contracts with customers when the parties have executed the contract and are committed to performing their respective obligations, the rights of each party are identified, payment terms are identified, the contract has commercial substance, and it is probable substantially all of the consideration will be collected.
Imputed interest on our operating leases was $0.3 million as of December 31, 2024. At December 31, 2024 and 2023, respectively, we had approximately $0.7 million of ROU operating lease assets recorded within buildings and equipment on the consolidated balance sheets.
At December 31, 2025 and 2024, we had approximately $0.6 million and $0.7 million, respectively, of ROU operating lease assets recorded within buildings and equipment on the consolidated balance sheets. Operating lease expense associated with ROU assets is recognized on a monthly basis over the lease term in operating costs on the consolidated statements of operation.
The Chief Operating Decision Maker (“CODM”), who is the Company’s Chief Executive Officer, reviews and assesses operating performance measures related to our Electric Operations and our Coal Operations segments. ​ In addition to these reportable segments, the Company has a “Corporate and Other and Eliminations” category, which is not significant enough, on a stand-alone basis, to be considered an operating segment.
In addition to these reportable segments, the Company has a “Corporate and Other and Eliminations” category, which is not significant enough, on a stand-alone basis, to be considered an operating segment. Corporate and Other and Eliminations primarily consist of unallocated corporate costs and activities, including our equity method investments.
Recent Accounting Pronouncements - Adopted The Company has adopted Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which is effective retrospectively for the year end December 31, 2024.
Recent Accounting Pronouncements - Adopted The Company has adopted Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which is effective for fiscal years beginning after December 15, 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Removed
Item 1A. Risk Factors " for discussion of risks associated with the estimates of the Company’s reserves and resources. Summary of All Mining Properties The Company has seven total mining properties.
Added
ITEM 1A. RISK FACTORS Risks Related to our Business Global economic conditions or economic conditions in any of the industries in which our customers operate as well as sustained uncertainty in financial markets could have material adverse impacts on our business and financial condition that we currently cannot predict.
Removed
These properties are the Oaktown Mining Complex (“Oaktown”), which is comprised of Oaktown Fuels No. 1 Mine and Oaktown Fuels No. 2 Mine, the Ace in the Hole Mine, the Ace in the Hole Mine #2 Reserves, Prosperity, Freelandville and Carlisle.
Added
Weakness in global economic conditions or economic conditions in any of the industries we serve or in the financial markets could materially adversely affect our business and financial condition.
Removed
Oaktown Fuels No. 2, Prosperity and Freelandville were temporarily idled in February of 2024 as part of the Organizational Restructuring in “ Note 17 – Organizational Restructuring ” to the Consolidated Financial Statements below.
Added
For example: ● the demand for electricity in the U.S. and globally may decline if economic conditions deteriorate, which may negatively impact the revenues, margins, and profitability of our business; ● any inability of our customers to raise capital could adversely affect their ability to honor their obligations to us; and ● our future ability to access the capital markets may be restricted as a result of future economic conditions, which could materially impact our ability to grow our business, including our planned addition of natural gas-fired generation to Merom and development of our coal reserves.
Removed
Ace in the Hole Mine and Carlisle are fully depleted. 46 Table of Contents The Oaktown Fuels No. 1 Mine is an underground mine in the Illinois Basin located near Oaktown in Knox County, Indiana. Oaktown Fuels No. 1 Mine utilizes continuous mining units operating in room and pillar mining techniques to produce high-sulfur coal.
Added
The stability and profitability of our operations could be adversely affected if our customers do not honor existing contracts or do not extend existing contracts or enter into new long-term contracts for accredited capacity, electric power or coal.
Removed
The Oaktown Fuels No. 2 Mine is an underground mine in the Illinois Basin (“ILB”) located near Oaktown in Knox County, Indiana. The Oaktown Fuels No. 2 Mine utilizes continuous mining units operating in room and pillar mining techniques to produce high-sulfur coal. The preparation plant at Oaktown has a throughput capacity of 1,600 tons of raw coal per hour.
Added
In 2025, a significant portion of our electric power, accredited capacity and coal sales were under contracts having a term greater than one year, which we refer to as long-term contracts. These contracts have historically provided a relatively secure market for the amount of production committed under the terms of the contracts.
Removed
Freelandville is a surface mine in the Illinois Basin located near Freelandville in Knox County, Indiana. Freelandville utilizes surface mining techniques to produce high-sulfur coal from as many as three seams. Prosperity is a surface mine in the Illinois Basin located near Petersburg in Pike County, Indiana. Prosperity utilizes surface mining techniques to produce low-sulfur coal.
Added
From time to time, industry conditions could make it more difficult for us to enter into long-term contracts with our customers, and if supply exceeds demand in the accredited capacity, electric power and coal industries, our customers may become less willing to lock in price or quantity commitments for an extended period of time.
Removed
The low-sulfur coal is trucked to the Oaktown and other Sunrise Coal logistic facilities where it is blended with coal from the Oaktown Mines.
Added
Accordingly, we may not be able to continue to obtain long-term sales contracts with reliable customers as existing contracts expire, which could subject an increasing portion of our revenue stream to the increased volatility of the spot market.
Removed
These properties and further summaries concerning property description, purpose, property overview, geology, background, processing operations, mine infrastructure, and market analysis can be found and are hereby incorporated by reference from Sections 1.1, 1.2, 1.3, 1.6, 2.1, 3, 4, 5, 6, 7.1, 7.3, 7.4, 8, 9, and 10 from the March 2025 Technical Report Summary prepared by the John T.
Added
Our financial performance may be impacted by price fluctuations in the electric power markets, as well as fluctuations in coal markets and other market factors that are beyond our control. Market prices for electric power, accredited capacity, coal and other ancillary services are unpredictable and tend to fluctuate substantially. Electric power generally must be produced concurrently with its use.
Removed
Boyd Company, attached as Exhibit 99.1 to this Form 10-K. The following figure shows the general location of Merom and our mining properties discussed above: Individual Mining Properties The following information concerning our mining properties has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K.
Added
As a result, power prices are subject to significant volatility due to supply and demand imbalances, especially in the day-ahead and spot markets.
Removed
Subpart 1300 of Regulation S-K requires us to disclose our mineral (coal) resources, which we have none, in addition to our mineral (coal) reserves, as of the end of our most recently completed fiscal year both in the aggregate and for each of our individually material mining properties.
Added
While we currently sell a significant portion of our electric power pursuant to long-term contracts (where we may be less susceptible to day-to-day fluctuations), we also sell a material amount of power in the competitive wholesale market including through MISO. A significant portion of the electricity we sell is used in residences and commercial businesses for heating and air conditioning.
Removed
As used in this Annual Report on Form 10-K, the terms “mineral resources,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with subpart 1300 of Regulation S-K.
Added
Long and short-term power prices may fluctuate substantially due to factors outside of the Company’s control, including: ● changes in generation capacity in the Company’s markets, including the addition of new supplies of power as a result of the development of new plants, expansion of existing plants, retirement of existing plants or addition of new transmission capacity; ● electric supply disruptions, including plant outages and transmission disruptions; ● changes in power transmission infrastructure; ● transportation capacity constraints or inefficiencies; ● weather conditions, including extreme weather conditions and seasonal fluctuations, including the effects of climate change; 19 Table of Contents ● changes in commodity prices and the supply and available inventory of commodities, including but not limited to natural gas, coal and oil; ● changes in the demand for electric power, or in patterns of power usage, including the potential development of demand-side management tools and practices, distributed generation, and more efficient end-use technologies; ● development of new fuels, new technologies and new forms of competition for the production of electric power; ● economic and political conditions; ● changes in law, including judicial decisions, environmental regulations and environmental legislation; and ● federal, state and provincial power regulations and legislation, and regulations and actions of the ISO and RTOs.
Removed
Under subpart 1300 of Regulation S-K, mineral resources may not be classified as “mineral reserves” unless the determination 47 Table of Contents has been made by a qualified person (“QP”) that the mineral resources can be the basis of an economically viable project.
Added
Such factors and the associated fluctuations in power prices have affected the Company’s profitability in the past and are expected to continue to do so in the future. Some of our long-term sales contracts contain provisions allowing for the termination of the contract or the suspension of purchases by customers or, in certain cases, the renegotiation of prices.
Removed
You are specifically cautioned not to assume that any part or all of the mineral deposits (including any mineral resources) in these categories will ever be converted into mineral reserves, as defined by the SEC.
Added
Several of our long-term electric power, accredited capacity and coal contracts contain provisions that allow the customer to suspend or terminate performance under the contract upon the occurrence or continuation of certain events that are beyond the customer’s reasonable control.
Removed
Internal qualified person(s) have estimated the Company’s mineral reserves and mineral resources based on geologic data, coal ownership (control) information, and current and/or proposed operating plans. Periodic updates occur to mineral reserve and mineral resource estimates attributable to revised mine plans, new exploration data, depletion from coal production, property acquisitions or dispositions, and/or other geologic or mining data.
Added
Such events could include force majeure, labor disputes, mechanical malfunctions and changes in government regulations, including, in the case of our coal contracts, changes in environmental regulations rendering use of our coal inconsistent with the customer’s environmental compliance strategies. Additionally, most of our long-term coal contracts contain provisions requiring us to deliver coal within stated ranges for specific coal characteristics.
Removed
Sunrise’s estimates of mineral reserves are proven and probable reserves that could be extracted or produced at the time of the reserve determination, economically, legally, and after considering all material modifying factors. Modifications or updates of the estimates of the Company’s mineral reserves is limited to qualified geologists and mining engineers.
Added
Failure to meet these specifications can result in economic penalties, rejection or suspension of shipments or termination of the contracts. In the event of early termination of any of our long-term contracts, if we are unable to enter into new contracts or similar terms, our business, financial condition and results of operations could be adversely affected.
Removed
All modifications or updates of the estimates of recoverable coal reserves are documented. The John T. Boyd Company, a qualified person firm, has assessed the Company’s estimates of mineral reserves and mineral resources and supporting information. Based upon the review, John T. Boyd Company provided modification to the Company’s estimates of mineral reserves where warranted.
Added
Further, long-term coal sales contracts may contain provisions that allow for the purchase price to be renegotiated at periodic intervals, however, we had no coal contracts with price reopeners at December 31, 2025.
Removed
The information that follows is derived, for the most part, from, and in some instances is extracted from, the Oaktown Mining Complex technical report summary (“TRS”) from John T.
Added
These price reopener provisions may automatically set a new price based on the prevailing market price or, in some instances, require the parties to the contract to agree on a new price. Any adjustment or renegotiation leading to a significantly lower contract price could adversely affect our operating profit margins.
Removed
Boyd Company dated March 2025 in accordance with Subpart 1300 of Regulation S-K (Coal Resources and Coal Reserves, Oaktown Mining Complex) attached hereto as Exhibit 99.1 to this Form 10-K; and a letter, dated March 7, 2025, from John T.
Added
Accordingly, long-term contracts may provide only limited protection during adverse market conditions. In some circumstances, failure of the parties to agree on a price under a reopener provision can also lead to early termination of a contract.
Removed
Boyd Company providing an update of estimated coal reserves at the Oaktown Mining Complex as of December 31, 2024, attached as Exhibit 99.2 to this Form 10-K. The Oaktown Mining Complex is the Company’s individually material property. Sections of the following information provided herein do not fully describe assumptions, qualifications, and procedures.
Added
We depend on a limited number of customers for a significant portion of our revenues, and the loss of one or more significant customers could affect our ability to maintain the sales volume, price of our products and profitability.
Removed
Reference should be made to the full text of the TRS which is made a part of this Annual report on Form 10-K and incorporated hereby by reference. The Oaktown Mining Complex TRS was prepared by the John T. Boyd Company in compliance with the Item 60(b)(96) and subpart 1300 of Regulation S-K.
Added
The following table shows consolidated operating revenue concentration greater than 10% in our Electric Operations segment in dollars and percentages for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Year Ended December 31, ​ Segment ​ 2025 ​ 2024 ​ 2025 ​ 2024 ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ Customer A Electric Operations ​ $ 110,006 ​ $ 123,504 ​ 23.4 % ​ 30.6 % Customer B Electric Operations ​ $ 47,248 ​ $ — ​ 10.1 % ​ — % Customer C Electric Operations ​ $ — ​ $ 51,639 ​ — % ​ 12.8 % 20 Table of Contents The loss of one or more of these material customers without finding a replacement customer could have a material adverse effect on our business, financial condition and results of operations.
Removed
The Company hereby incorporates by reference Section 6.3 "Coal Reserves" from the TRS, attached as Exhibit 99.1 to this Form 10-K, as to the mineral price, cut-off grade, and metallurgical recovery factors utilized in John T. Boyd Company’s preparation of the mineral reserve estimates. The Company hereby incorporates the letter, dated March 7, 2025, from John T.
Added
The following table shows consolidated operating revenue concentration greater than 10% in our Coal Operations segment in dollars and percentages for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Year Ended December 31, ​ Segment ​ 2025 ​ 2024 ​ 2025 ​ 2024 ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ Customer A Coal Operations ​ $ 48,983 ​ $ 54,593 ​ 10.4 % ​ 13.5 % Customer B Coal Operations ​ $ 64,799 ​ $ 43,394 ​ 13.8 % ​ 10.7 % If in the future we lose any of these customers without finding replacement customers willing to purchase an equivalent amount of coal on similar terms, or if these customers were to decrease the amounts of coal purchased or the terms, including pricing terms, on which they buy coal from us, it could have a material adverse effect on our business, financial condition and results of operations.
Removed
Boyd Company, attached as Exhibit 99.2 to this Form 10-K, providing an update of the Company’s mineral reserves at the Oaktown Mining Complex as of December 31, 2024 and including a comparison of the Company’s mineral reserves at the Oaktown Mining Complex as of December 31, 2024 and as of December 31, 2023.
Added
Our recent efforts to sell our accredited capacity to long-term customers may not be successful.
Removed
The following table provides a summary of all of the Company’s mineral reserves determined by the John T.
Added
In light of the fact that the Company believes it holds a considerable portion of the remaining unsold accredited capacity in MISO Zone 6, covering Indiana and parts of western Kentucky, the Company has recently focused its efforts on entering into one or more long-term contracts for the sale of its accredited capacity and energy to large load end user(s) through a utility or cooperative.
Removed
Boyd Company as of the end of the fiscal year ended December 31, 2024: SUMMARY MINERAL RESERVES AT END OF THE FISCAL YEAR ENDED DECEMBER 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ Mineral Reserves (tons in millions) ​ Proven Probable Total Oaktown ​ ​ ​ ​ ​ ​ Oaktown Fuels No. 1 Mine 25.7 ​ 2.7 28.4 Oaktown Fuels No. 2 Mine 5.9 ​ 0.2 6.1 Total 31.6 2.9 34.5 ​ Oaktown Mining Complex The Oaktown Mining Complex is a coal mining and processing operation located in Knox and Sullivan counties, Indiana, and Crawford and Lawrence counties, Illinois.
Added
Failure to enter into one or more long-term contracts may have a material adverse effect on our business, financial condition and results of operations.
Removed
Oaktown is an underground Room-and-Pillar (“R&P”) coal mining complex. It is comprised of 83 square miles within the ILB coal-producing region of the mid-western U.S. Oaktown operations currently consists of one active underground mine - Oaktown Fuels No. 1 Mine - and related infrastructure.
Added
Participation in MISO’s ERAS program may not achieve the benefits targeted by the Company and, if not successful, could have a material adverse effect on the Company’s business, financial condition and/or results of operations . ​ On November 3, 2025, Hallador Power submitted an application to MISO’s ERAS program (the “ERAS program”) to obtain an interconnection that would allow the Company to add up to an additional 515 MW of natural gas generation adjacent to Hallador Power’s Merom Generating Station.
Removed
Geographically, the Oaktown Complex Coal Preparation 48 Table of Contents Plant is located at approximately 28°51’24.7” N latitude and 87°25’30.9” W longitude. Within the Oaktown area and its immediate vicinity, our Company controls approximately 64,000 acres of mineral rights. We have a complex collection of leases that apply to more than 1,000 tracts.
Added
On December 22, 2025, the Company received notice from MISO that its ERAS program application had been accepted by MISO, which is expected to move the Company into a 6- to 9-month MISO review and approval process to gain access to the power grid versus the traditional 4.5-year process. ​ MISO’s acceptance of the ERAS application for review does not guarantee that the Company’s application will ultimately be approved by MISO or, if approved, that the Company will be able to add additional 515 MW of natural gas generation , or any additional generation, to take advantage of the approved interconnection.
Removed
Leased tracts range from less than an acre to several hundred acres in size. Ownership of the surface rights and the mineral rights is often severed for the properties and the estates are often fractions, in which mineral rights are split between several owners.
Added
Participation in the ERAS program and construction and development of additional generation is capital intensive and includes construction, operational, financial, regulatory and legal risks that could impact the project’s viability and/or timeline, and the Company’s failure to achieve all or any of the targeted benefits of the ERAS program could have a material adverse effect on the Company’s business, financial condition and/or results of operations.
Removed
The Company and its predecessors have acquired the necessary rights to support development and operations through purchase or lease agreements with predominately private owners or entities. The Company controls surface rights through fee simple ownership for over 1,700 permitted acres, holding mine accesses, processing, storing, shipping, and refuse disposal facilities (i.e., refuse impoundment site and fine refuse injection sites).
Added
Expected demand growth from the technology sector, manufacturing and other users of electricity, which has driven recent improvements in the outlook for the competitive wholesale power generation market, may not actually occur or be sustained.
Removed
We acquired Oaktown Fuels No. 1 and No. 2 Mines from Vectren Fuels in 2014. Oaktown utilizes R&P mining (employing Continuous Miners, or CM) for primary production. This mining method is highly productive and commercially demonstrated; it has been one of the primary approaches to underground mining the Indiana V Seam for decades.
Added
Recently, the market outlook for competitive wholesale power generation has improved largely based on expected future demand from several sources, including data centers and other technology sector requirements, re-shoring of manufacturing in the U.S., the electrification of industry, and other demand drivers.
Removed
Oaktown has utilized this mining method since the inception of each operation. To date, Oaktown has produced a combined 75.0 million tons of clean coal. Oaktown is configured to operate up to 6 CM sections (currently operating 4 CM sections), with an annual production target of approximately 3.6 million tons.
Added
Various factors including but not limited to unfavorable macroeconomic conditions, increases in energy efficiency or supply, or advances in technology, could result in lower-than-expected electricity demand and unfavorable market conditions for our power generating business and lower demand for coal from our coal mining operations.
Removed
The Oaktown Preparation Plant serves as the coal washing and shipment facility for Oaktown’s two R&P mines. The plant was commissioned in 2009 to wash coal by the Oaktown Fuels No. 1 Mine. The Oaktown Preparation Plant’s processing capacity was upgraded to 1,800 raw tons-per-hour (TPH) from its previous 1,600 raw TPH in 2023.
Added
A general economic slowdown or recession, a downturn in technology, manufacturing, or other sectors, an oversupply of natural gas, or various other economic 21 Table of Contents conditions could reduce electricity and coal demand and prices.
Removed
Coal from Oaktown is transported to customers via rail and truck. The Oaktown Preparation Plant is served by both the CSX Railroad and Indiana Railroad (INRD) via a rail spur and rail loop that connects the complex with the mainline rail just north of Oaktown, Indiana.
Added
Improvements in energy efficiency, conservation efforts, and demand-side power management technologies, as well as other shifts in energy consumption, may reduce demand or slow demand growth, both from our power generating business and from our coal operations.
Removed
Additionally, the Oaktown Preparation Plant can facilitate the loading of trucks for direct transport to select customers, or to our transload facility in Princeton, Indiana serviced by the Norfolk Southern (NS) Railroad. Sources of electrical power, water, supplies, and materials are readily available. Electrical power is provided to the mines and facilities by regional utility companies.
Added
Furthermore, the penetration of renewable generation resources has, and may continue to have, negative effects on wholesale power prices and the economics of dispatchable generation units. Advances in technology may also provide alternative methods to produce, dispatch, and store power, which could also lead to increased overall electricity supply.
Removed
Water is supplied by public water services, surface impoundments, or water wells. Multiple permits are required by federal and state law for underground mining, coal preparation and related facilities, and other incidental activities. All necessary permits to support current operations are in place or pending approval.
Added
Any of these factors could impact the dispatch, capacity factors, and value of our generation facility and adversely impact demand for our coal. Our ability to collect payments from our customers could be impaired if their creditworthiness declines or if they fail to honor their contracts with us.
Removed
New permits or permit revisions may be necessary from time to time to facilitate future operations. Given sufficient time and planning, we should be able to secure new permits, as required, to maintain our planned operations within the context of the current regulations.
Added
Our ability to receive payment for electric power, accredited capacity and coal sold and delivered depends on the continued creditworthiness of our customers. If the creditworthiness of our customers declines significantly, our business could be adversely affected.
Removed
Permits generally require that the Company post a performance bond in an amount established by the regulator program to: (1) provide assurance that any disturbance or liability created during mining operation is properly mitigated, and (2) assure that all regulation requirements of the permit are fully satisfied.
Added
In addition, if a customer refuses to accept shipments of our coal for which they have an existing contractual obligation, our revenues will decrease, and we may have to reduce production at our mines until our customer’s contractual obligations are honored.
Removed
We hold surety bonds of $10.0 million to cover obligations relating to mining and reclamation, road repair, etc. at the Oaktown Mining Complex.
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Contractors that we use to provide employees at our power plant may experience work stoppages, slowdowns, lockouts or other labor disputes. At Merom, our operator, CAMS, employs represented workers.
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Additional information is provided in the following table regarding Oaktown’s mineral reserves: OAKTOWN Recoverable Coal Reserves as of December 31, 2024 and 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Received As Received ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Heat ​ SO2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Value ​ Content ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Btu/lb) ​ (lbs/MMBtu) ​ Owned ​ Leased ​ Recoverable Coal Reserves (As-Received) Mine/Reserve Approximate Approximate (%) (%) Proven Probable 12/31/2024 12/31/2023 Oaktown Mining Complex Oaktown Fuels No. 1 Mine 11,630 ​ 6.0 — 100.0 25.7 ​ 2.7 28.4 34.1 Oaktown Fuels No. 2 Mine 11,576 ​ 5.0 — 100.0 5.9 ​ 0.2 6.1 26.6 Total ​ ​ ​ ​ ​ ​ ​ 31.6 2.9 34.5 60.7 ​ 49 Table of Contents Oaktown Fuels No. 1 Mine As of December 31, 2024, the assigned and accessible reserve base for the Oaktown Fuels No. 1 Mine contains 28.4 million tons of recoverable Indiana V seam coal, of which 28.4 million tons are currently permitted.
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While these workers are not Hallador Power employees, work stoppages, slowdowns, lockouts or other labor disputes within the CAMS workforce could adversely affect and disrupt our productivity and operations at the plant. In our Coal Operations, although none of our coal employees are members of unions, our workforce may not remain union-free in the future.
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The reserve contains saleable tons which average heating content of approximately 11,630 Btu per pound with approximately 6.0 pounds of sulfur dioxide per MMBtu on an as-received basis.
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None of our employees are represented under collective bargaining agreements. However, all of our workforce may not remain union-free in the future, and legislative, regulatory or other governmental action could make it more difficult to remain union-free.
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Access to the Oaktown Fuels No. 1 Mine is via a 90-foot-deep box cut and a 2,200-foot long slope, which facilitates the egress of coals being mined in excess of 375 feet below the surface.
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If some or all of our currently union-free operations were to become unionized, it could adversely affect our productivity and increase the risk of work stoppages at our mining complexes.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs these systems, processes, training, and upgrades are implemented, updates are provided to the Executive Team. We have not identified an indication of a substantive cyber security incident that would have a material impact on our business, results of operations or financial statements.
Biggest changeAs these systems, processes, training, and upgrades are implemented, updates are provided to the Executive Team. We have not identified an indication of a substantive cyber security incident that would have a material impact on our business, results of operations or financial statements. For additional information regarding risks from cybersecurity threats, please refer to “ Item 1A.
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For additional information regarding risks from cybersecurity threats, please refer to Item 1A, “ Risk Factors ” above.
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Risk Factors ” above. ​ 36 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the Company believes that it has made appropriate provisions for all known legal matters, the outcome of legal proceedings is inherently uncertain, and there can be no assurance that the resolution of such matters will not have a material adverse effect on the Company's financial position, results of operations, or cash flows. ​ Subsequent to the end of the fourth quarter, the Company reached an agreement in principle to resolve a putative class action related to certain of its employment practices for an amount not material to its financial results.
Biggest changeWhile the Company believes that it has made appropriate provisions for all known legal matters, the outcome of legal proceedings is inherently uncertain, and there can be no assurance that the resolution of such matters will not have a material adverse effect on the Company's financial position, results of operations, or cash flows.
As of the filing date of this report, the Company does not have any active lawsuits or claims which are deemed material, but should facts or circumstances change, some or all of these alleged claims could have a material impact on the Company’s financial results, results of operations and/or cash flows. ​ The Company accrues liabilities for legal matters when it is probable that a liability has been incurred and the amount can be reasonably estimated.
As of the filing date of this report, the Company does not have any active lawsuits or claims which are deemed material, but should facts or circumstances change, some or all of these alleged claims could have a material impact on the Company’s financial results, results of operations and/or cash flows.
See “Note 22 – Contingencies” to our Consolidated Financial Statements. ​ The Company will continue to monitor all proceedings and will update shareholders as necessary, in accordance with applicable legal and regulatory requirements. ​ ITEM 4. MINE SAFETY DISCLOSURES. Safety is a core value for us and our subsidiaries.
The Company will continue to monitor all proceedings and will update shareholders as necessary, in accordance with applicable legal and regulatory requirements. ITEM 4. MINE SAFETY DISCLOSURES. Safety is a core value for us and our subsidiaries. As such, we have dedicated a great deal of time, energy, and resources to creating a culture of safety.
As such, we have dedicated a great deal of time, energy, and resources to creating a culture of safety. See Exhibit 95 to this Form 10-K for a listing of our mine safety violations. PART II
See Exhibit 95.1 to this Form 10-K for a listing of our mine safety violations. PART II
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The liability related to this settlement was accrued during the fourth quarter, when settlement negotiations began. The resolution has not yet been finalized, but the Company expects the matter to be closed during the first half of 2025.
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The Company accrues liabilities for legal matters when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 6. [RESERVED] ​ 40 Table of Contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Our consolidated financial statements should be read in conjunction with this discussion.
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis, which should be read in conjunction with our consolidated financial statements, is intended to assist in providing an understanding of our results of operations and financial condition and is organized as follows: ● Overview.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Stock Price Information Our common stock trades on the NASDAQ Capital Market under the symbol HNRG, and 40.9% is held by our officers, directors, and their affiliates.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Stock Price Information Our common stock trades on the NASDAQ Capital Market under the symbol HNRG, and 17.3% is held by our officers, directors, and their affiliates. On March 10, 2026, we had 206 shareholders of record of our common stock.
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On March 10, 2025, we had 193 shareholders of record of our common stock; this number does not include the shareholders holding stock in “street name.” We estimate we have over 5,000 street name holders. Equity Compensation Plan Information See “Note 8 – Stock Compensation Plans” to our consolidated financial statements.
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These amounts do not include the number of shareholders whose shares are nominally held by banks, brokerages or other institutions, but include each such institution as one shareholder of record. Equity Compensation Plan Information See “Note 8 – Stock Compensation Plans” to our consolidated financial statements. ITEM 6. [RESERVED] ​ 43 Table of Contents ​ ITEM 7.
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The following analysis includes a discussion of metrics on a per mega-watt hour (MWh) and per ton and basis as derived from the consolidated financial statements, which are considered non-GAAP measurements. These metrics are significant factors in assessing our operating results and profitability.
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This section provides a general description of our business and recent events. ● Results of Operations. This section provides an analysis of our results of operations for the years ended December 31, 2025 and 2024. ● Liquidity and Capital Resources.
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OVERVIEW Hallador Energy Company (the “Company” or “Hallador”) is an energy company operating in the state of Indiana. Our wholly owned subsidiary Hallador Power, operates our Merom Power Plant ("Merom"), a one gigawatt (“GW”) power plant located in Sullivan County, Indiana. Merom is located in the Midcontinent Independent System Operator’s ("MISO") footprint.
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This section provides an analysis of our liquidity and consolidated statements of cash flows. ● Critical Accounting Policies, Judgments and Estimates. This section discusses those material accounting policies that involve uncertainties and require significant judgment in their application. ● Quantitative and Qualitative Disclosures about Market Risk.
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We also mine coal in the State of Indiana through our wholly-owned subsidiary Sunrise Coal, LLC (“Sunrise”), serving the electric power generation industry. During the fourth quarter of 2024, we completed our review of the coal mining facilities and future mining plans. The impairment analysis was based upon our finalized coal mining operating plans, market driven pricing and cost trends.
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This section provides discussion and analysis of the commodity, interest rate and other market risks that our company faces. Included below is an analysis of our results of operations and cash flows for 2025, as compared to 2024. An analysis of our results of operations and cash flows for 2024, as compared to 2023, can be found under “
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As part of that analysis, we determined the carrying amount of our coal mining long-lived asset group was not recoverable and recorded a non-cash, long-lived asset impairment charge of $215.1 million in the fourth quarter of 2024.
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See “Note 19 – Impairment of Coal Properties” to the Consolidated Financial Statements in this Form 10-K for further information on the impairment analysis. ​ Our business is organized based on the services and products we provide in two segments: (i) Electric Operations and (ii) Coal Operations.
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The Chief Operating Decision Maker (“CODM”), who is the Company’s Chief Executive Officer, reviews and assesses operating performance measures related to our Electric Operations and our Coal Operations segments. In addition to these reportable segments, the Company has a “Corporate and Other and Eliminations” category, which is not significant enough, on a stand-alone basis, to be considered an operating segment.
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Corporate and Other and Eliminations primarily consist of unallocated corporate costs and activities, including a 50% interest in Sunrise Energy LLC and Oaktown Gas, LLC, which are accounted for using the equity method. ​ Throughout 2024, we made progress on transitioning Hallador Energy from a bituminous coal producer to an integrated independent power producer (“IPP”).
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This strategic transition has been a deliberate response to market signals and what we believe to be the superior economics of the IPP business model. As such, our focus remains on maximizing the value of Merom while actively seeking opportunities to acquire additional dispatchable generators.
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We have also prioritized building strong relationships with counterparties to secure favorable terms for collateral, enabling us to effectively leverage forward power sales in 2025 to offset pricing volatility in the spot market.
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This approach enhances our financial flexibility and strengthens our position in the evolving energy market. ​ In the fall of 2024, we reached a key milestone in our IPP transformation by signing a non-binding term sheet with a leading global data center developer for the supply of a significant portion of Merom's output of capacity and energy for well over a decade.
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As evidenced by our announcement of an exclusivity agreement with this development partner in January 2025, we are continuing to make progress as we seek to finalize a definitive agreement.
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As we have previously disclosed, the exclusivity period runs through the beginning of June 2025, in exchange for payments from the developer to Hallador Power of up to $5.0 million, depending on if and when a definitive agreement is finalized. This type of deal is complex and involves multiple parties, which adds time and challenges to negotiations.
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Despite these challenges, we remain encouraged by our partners and the steady progress that we continue to make. Our pursuit of this agreement further demonstrates our commitment towards forging a strategic partnership that we believe will create significant value for our shareholders for years to come.
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The completion of this proposed transaction is subject to, among other matters, the negotiation and execution of definitive agreements and there can be no assurance that definitive agreements will be entered into or that the proposed transaction will be consummated on the terms or timeframe currently contemplated, or at all. ​ 41 Table of Contents We continue to witness the prevalent industry trend of retiring dispatchable generators, including coal, in favor of non-dispatchable resources such as wind and solar.
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We believe this transition from dispatchable to non-dispatchable generation made the attributes of our subsidiary, Hallador Power, much more valuable due to the enhanced reliability that we provide versus non-dispatchable generators. However, we believe the retirement of coal-based generation and lower natural gas prices could reduce the demand for coal supply, potentially lowering the value of Sunrise.
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During 2024, in response to declining coal demand, we reduced our coal production volume by approximately 40% and idled the higher cost surface mines. This optimization of coal production reduced our operational cash cost structure and better aligned our coal strategy to primarily support our internal electric generation. ​ Merom can produce up to 6.0 million Mega-Watthours (“MWh”) annually.
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The forward power price curves indicate that the margins earned on energy produced at Merom and the value of the accredited capacity sales assigned to the plant continues to increase. We are seeing strong indications for both energy and capacity sales in 2025 and beyond, especially considering our negotiations related to supporting data center development within the State of Indiana.
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In addition, while we largely held to our traditional approach of selling energy through bespoke bi-lateral agreements on a unit or plant contingent basis, during 2024 we sold a limited amount of power on a firm basis.
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While we continue to limit these types of firm sales to mitigate risk and wait for higher priced contracts to take effect, we will strategically utilize them to smooth our exposure to the spot market.
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This approach enables us to capture some of the episodic cash generation driven by demand from extreme weather and various other conditions stressing the power grid while limiting our exposure to periods of mild weather and lower demand. ​ In 2024, the ongoing surplus of natural gas in the market and mild weather patterns continued to moderate energy prices throughout the year and kept spot energy prices weak.
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We began to see favorable pricing signals at the end of the fourth quarter of 2024 and subsequent to year-end. ​ The ability to store a commodity is inherently tied to the volatility of that commodity. Coal can be piled up for years, thus its volatility is low.
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Oil and natural gas face transportation and storage challenges which increase price volatility. The limitations of storing viable energy, coupled with non-dispatchable generation gaining market share in an environment where there is unpredictability in the weather, indicates to us that energy's price volatility is likely to increase over the next decade.
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This volatility will keep the forward power price premium intact. ​ We are excited by the opportunity for Hallador Power to capture higher prices and energy volumes in 2025 and beyond compared to what we have historically achieved in our relatively short ownership tenure of Merom.
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In 2024, we sold 4.2 million MWh at an average sales price of approximately $48.62 per MWh. At the start of the year, we had 1.9 million MWh contracted, leaving us with significant exposure to the spot electricity market.
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Heading into 2025, we have contracted approximately 4.3 million MWh at an average price of $37.24 per MWh, which should help to smooth our exposure to the spot market. For 2026, we have already contracted 3.4 million MWh at $44.43 per MWh.
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Following 2026, we are optimistic that we can sell energy at higher prices in support of data center development and/or to traditional wholesale customers in line with the indicators of a higher forward curve. The tables included below highlight some of the revenue and margin improvements we have seen in our forward contracted power sales for 2025 and thereafter.
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These tables do not include the significantly higher prices that we are expecting if we are able to finalize our agreements in support of data center development. ​ In addition to the transaction we are negotiating with Merom, we continue to evaluate other strategic transactions that could add durability, scale, and geographic expansion opportunities to our electric operations.
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While these types of deals are limited and complex, we believe that Hallador is uniquely positioned to transform retiring and/or underperforming assets into future opportunities.
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This will enable us to supply high demand end users, such as data centers and on-shored industrial customers, with minimal impact to retail consumers, unlike a traditional utility siphoning off consumer power to serve these types of large load end-users.
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By continuing the operations of the dispatchable plants to support large load industrial users as the utilities transition to non-dispatchable generation, the new generation becomes additive to the already struggling grid rather than cannibalizing the overall reliability of what exists today.
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We are optimistic about the potential to add to our strategic portfolio and the long-term benefits that such a transaction could produce for the Company, its shareholders and its customers.
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This model for growth enables us to shift from transactional pricing related to plant acquisition, to traditional wholesale market pricing, and ultimately to the enhanced pricing associated with supporting data centers and other large load end users. 42 Table of Contents ​ In the first quarter of 2024, we announced a restructuring of our Coal Operations to address the increase in costs we experienced at our mines.
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See “Note 17 – Organizational Restructuring” to the Consolidated Financial Statements in this Form 10-K for further information. We spent much of the year adjusting to this restructuring to optimize production, headcount, and strategy to best support our Electric Operations and our existing third-party coal contracts.
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By reducing headcount, focusing production on our most profitable mines and units within those mines, and improving our infrastructure and processes within those favored units, we were able to both slow the impact of rapidly increasing costs and reduce costs to better support the continued operations of our mines. ​ Historically, Sunrise has produced between four and six million tons annually.
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As we continue to optimize the mines in support of the plant, we expect to produce approximately 3.6 million tons of coal in 2025, with approximately 2.3 million tons produced directed to support our Electric Operations.
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We have also secured supplemental coal from third party suppliers at favorable prices to diversify self-production supply risk and to provide us additional flexibility in our sales portfolio and to fulfill future sales obligations to third-parties and Merom as shown in the table below.
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The optionality to obtain low-cost tons either internally or from third parties while capturing upward swings in the commodity markets for coal should further maximize margins while optimizing fuels costs at Merom. ​ We remain excited about the continued and deliberate transformation of Hallador from a commodity focused producer of coal to an IPP.
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We believe this transition provides significant opportunity to capture the expanding margins of the energy markets and capitalize on the soaring demand for electricity.
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We are pleased by the strong interest we continue to see from potential counterparties in our energy and capacity offerings, bolstered by Indiana’s efforts to attract data centers and other high-density power users through its business-friendly climate and favorable tax policies.
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With the continued growth of our sales book, coupled with our ongoing focus to transition our operations to primarily electricity generation, we believe we are well positioned to materially strengthen our opportunities for growth and cash flow generation. ​ 43 Table of Contents Solid Forward Sales Position - Segment Basis, Before Intercompany Eliminations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2026 2027 2028 2029 Total Power ​ ​ ​ ​ ​ ​ Energy ​ ​ ​ ​ ​ ​ Contracted MWh (in millions) ​ 4.25 ​ 3.36 ​ 1.78 ​ 1.09 ​ 0.27 ​ 10.75 Average contracted price per MWh ​ $ 37.24 ​ $ 44.43 ​ $ 54.66 ​ $ 52.94 ​ $ 51.33 ​ ​ ​ Contracted revenue (in millions) ​ $ 158.27 ​ $ 149.28 ​ $ 97.29 ​ $ 57.70 ​ $ 13.86 ​ $ 476.40 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capacity ​ ​ ​ ​ ​ ​ Average daily contracted capacity MWh ​ 773 ​ 727 ​ 623 ​ 454 ​ 100 ​ ​ Average contracted capacity price per MWd ​ $ 201 ​ $ 230 ​ $ 226 ​ $ 225 ​ $ 230 ​ ​ ​ Contracted capacity revenue (in millions) ​ $ 55.95 ​ $ 61.12 ​ $ 51.40 ​ $ 37.33 ​ $ 3.47 ​ $ 209.27 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Energy & Capacity Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contracted Power revenue (in millions) ​ $ 214.22 ​ $ 210.40 ​ $ 148.69 ​ $ 95.03 ​ $ 17.33 ​ $ 685.67 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal ​ ​ ​ ​ ​ ​ Priced tons - 3rd party (in millions) ​ 2.95 ​ 2.50 ​ 2.50 ​ 0.50 ​ — ​ 8.45 Avg price per ton - 3rd party ​ $ 51.04 ​ $ 55.49 ​ $ 56.74 ​ $ 59.00 ​ $ — ​ ​ ​ Contracted coal revenue - 3rd party (in millions) ​ $ 150.57 ​ $ 138.73 ​ $ 141.85 ​ $ 29.50 ​ $ — ​ $ 460.65 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL CONTRACTED REVENUE (IN MILLIONS) - CONSOLIDATED ​ $ 364.79 ​ $ 349.13 ​ $ 290.54 ​ $ 124.53 ​ $ 17.33 ​ $ 1,146.32 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Priced tons - Intercompany (in millions) ​ 2.30 ​ 2.30 ​ 2.30 ​ 2.30 ​ — ​ 9.20 Avg price per ton - Intercompany ​ $ 51.00 ​ $ 51.00 ​ $ 51.00 ​ $ 51.00 ​ $ — ​ ​ ​ Contracted coal revenue - Intercompany (in millions) ​ $ 117.30 ​ $ 117.30 ​ $ 117.30 ​ $ 117.30 ​ $ — ​ $ 469.20 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL CONTRACTED REVENUE (IN MILLIONS) - SEGMENT ​ $ 482.09 ​ $ 466.43 ​ $ 407.84 ​ $ 241.83 ​ $ 17.33 ​ $ 1,615.52 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Actual revenue related to solid forward sales positions may differ materially for various reasons, including price adjustment features for coal quality and cost escalations, volume optionality provisions and potential force majeure events. ​ Electric Operations Internal Controls Disclosure Our electric operations employ third party service providers for the day-to-day operations and maintenance of Merom as well as managing market transactions and optimizing plant dispatch.
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We contract with Consolidated Asset Management Services (“CAMS”) to manage ongoing operations, maintenance and asset management functions at Merom. CAMS provides an operations and maintenance program which includes daily management of plant performance, safety protocols and workforce management. CAMS develops and implements predictive and preventative maintenance schedules designed to maximize plant availability and maintain compliance with environmental and regulatory standards.
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In coordination with our engineering teams, CAMS identifies and manages capital projects that aim to improve operational efficiency and reduce long-term costs. CAMS also provides performance monitoring and reporting. CAMS provides regular reports on key performance indicators (“KPIs”) such as heat rates and forced outage rates to help us assess plant efficiency.
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CAMS assists in ensuring adherence to local, state and federal regulations including 44 Table of Contents environmental rules and safety mandates. We maintain oversight of CAMS through regular audits and performance reviews, confirming all procedures align with our company policies and best practices.
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We engage with Alliance for Cooperative Energy Services Power Marketing, LLC (“ACES”), as our agent to manage our wholesale power market activities and risk management strategies related to electric operations. Through this relationship, ACES manages the dispatch and scheduling on the real-time and day-ahead markets.
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ACES manages bidding strategies, scheduling our generation in the relevant regional transmission organizations (“RTOs”) or independent system operators (“ISOs”). To optimize our sales portfolio, ACES analyzes energy market dynamics, identifies opportunities to optimize plant dispatch, and recommends operational adjustments to capture favorable margins.
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ACES assists in risk management by executing short-term trades on our behalf to mitigate price volatility and lock in predictable revenues as well as ensures that our participation in the energy markets adheres to relevant market rules and regulations.
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We receive regular risk reports and settlement statements, which our internal teams review to confirm accuracy and compliance with our company policies. We regularly review the performance and controls of CAMS and ACES. Our formal review processes include monthly performance reviews through joint meetings with CAMS and ACES to evaluate KPI trends, discuss operational challenges, and plan market strategies.
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Periodic internal and external audits examine environmental, safety, and financial compliance, ensuring third-party activities align with regulatory standards and Company objectives. We also have a risk committee that evaluates all marketing activities and exposures. Merom operates under permits issued by various agencies. CAMS provides support and expertise to ensure compliance with emissions requirements, water use regulations, and waste disposal guidelines.
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The power markets we operate in periodically update their rules and tariffs, which may affect how we dispatch our plants or manage financial positions. ACES continuously monitors changes, recommending updates to our strategies as needed. Volatility in wholesale power prices can impact revenue. ACES provides strategies to mitigate price risk.
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Equipment failures or unexpected downtime at coal plants can lead to missed market opportunities or contractual liabilities. Our relationship with CAMS is designed to minimize these risks through comprehensive operations and maintenance practices. Future environmental or market regulations may require capital investments or shift market behavior.
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Our teams, in conjunction with CAMS and ACES, monitor emerging policies to proactively plan operational or strategic adjustments. ​ Property Through Hallador Power, the Company owns and operates Merom, a 1,080 MW net coal fired power generating station, consisting of two 590 MW sub-critical water tube drum type steam turbine generators.
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Unit 1 entered commercial operations in 1982 and Unit 2 in 1983. The units are dispatched to the MISO interconnection. Hallador Power sells wholesale energy and accredited capacity to utilities within the MISO system through PPA’s and other bilateral transactions. Merom is located in Sullivan County, Indiana, on approximately 691 acres, which also holds a 112-acre landfill.
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Hallador Power has two tracts under option for approximately 72 acres for expansion and future development at Merom. Merom is about twenty miles from Sunrise’s Oaktown Mining Complex and has rail and truck access.
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The Company acquired Merom from Hoosier Energy Rural Electric Cooperative, Inc. in 2022. ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Power Capacity and Utilization ​ Nameplate capacity (MW) (i) 1,080 1,080 ​ Accredited capacity for the period (MW) (ii) 823 860 ​ Accredited capacity utilization (iii) 49 % 45 % i.
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Nameplate capacity for the Merom Power Plant refers to the maximum electric output generated by the plant in the period presented and may not reflect actual production. Actual production each period varies based on weather conditions, operational conditions, and other factors. 45 Table of Contents ii. Accredited capacity is based on MISO’s average seasonal accreditations for the year.
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Average seasonal accreditations were 808 MW and 838 MW per day for 2024 and 2023, respectively. Accreditations are weighted and adjusted annually based on 3-year rolling performance metrics. iii. Accredited capacity utilization is measured as power produced (MWh) divided by accredited capacity for the period (MW) multiplied by 24 times the number of days for the period.
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Permits are required by federal and state law for Merom’s facilities and landfill. Merom holds several construction and environmental permits for air, wastewater and solids waste disposal. All necessary permits to support current operations are in place.
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New permits or permit revisions may be necessary from time to time to facilitate future operations or to keep pace with the changing regulatory landscape. Given sufficient time and planning, we should be able to secure new permits, as required, to maintain our planned operations within the context of the current regulations. Merom continually excels in environmental excellence and compliance.
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Permits generally require that the Company post a performance bond in an amount established by the regulator program to: (1) provide assurance that any disturbance or liability created is properly mitigated, and (2) assure that all regulation requirements of the permit are fully satisfied. We hold surety bonds of $9.7 million to cover obligations relating to reclamation at Merom.
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Coal Operations Internal Controls Disclosure The preparation of coal reserve and resource estimates is conducted by independent individuals who are by virtue of their education, experience and professional association considered qualified persons (as defined in SEC rules). Company personnel meet on an annual basis with the independent qualified person to provide updates to the reserve and resource estimates.
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Company personnel review the work of the qualified person to ensure such work is prepared in accordance with applicable rules and regulations and that the data and assumptions provided were properly applied to the final reserve and resource model.
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The Company’s engineering personnel ensure estimates are based on current mine plans, incorporate the most recent drilling and lab data, properly reflect changes in permitting status, consider known encumbrances, and are consistent with operating knowledge and expectations in terms of mining methods, recovery rates, minimum seam heights or maximum strip ratios, and saleable qualities.
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An American National Standards Institute-certified third-party laboratory is utilized to support reserve and resource estimates. The laboratory follows standard sample preparation, security, and environmental procedures. In addition, the Company’s qualified person performs independent data verification procedures to ensure data is of sufficient quantity and reliability to reasonably support the coal reserve and resource estimates.
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Estimates of any mineral reserve and resources are always subject to a degree of uncertainty. The level of confidence that can be applied to a particular estimate is a function of, among other things, the amount, quality, and completeness of exploration data; geological complexity of the deposit; and economic, legal, social, and environmental factors associated with mining the reserve/resource.
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The Company’s current coal reserves and resource estimates are based on the best information available and are subject to updates as conditions change. Also refer to "

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAs part of that analysis, the Company determined the carrying amount of its long-lived assets were not recoverable and recorded a non-cash, long-lived asset impairment charge of $215.1 million in the fourth quarter of 2024. See “ Note 19 – Impairment of Coal Properties” to the Consolidated Finance Statements in this Form 10-K for further information on the impairment analysis.
Biggest changeAs part of that analysis, we determined the carrying amount of our coal mining long-lived asset group was not recoverable and recorded a non-cash, long-lived asset impairment charge of $215.1 million in the fourth quarter of 2024.
During the fourth quarter of 2024, we completed our annual impairment analysis, which was based upon the finalized operating plans of the Company, market driven pricing and cost trends.
During the fourth quarter of 2024, we completed our review of the coal mining facilities and future mining plans. The analysis was based upon our finalized coal mining operating plans, market driven pricing and cost trends.
SMCRA and similar state statutes require, among other things, that surface disturbance be restored in accordance with specified standards and approved reclamation plans. SMCRA requires us to restore affected surface areas to approximate the original contours as contemporaneously as practicable with the completion of surface mining operations.
SMCRA requires us to restore affected surface areas to approximate the original contours as contemporaneously as practicable with the completion of surface mining operations.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ” for a discussion of our business.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II of our Annual Report on Form 10-K for the year ended December 31, 2024, which is available through the SEC’s website at www.sec.gov. The capitalized terms used below have been defined in the notes to our consolidated financial statements.
Removed
Regulation and Laws The electric power generation and coal mining industries are subject to extensive regulation by federal, state, and local authorities on matters such as: ● employee health and safety; ● mine permits and other licensing requirements; ● air quality standards and greenhouse gas emissions; ● water quality standards; ● storage of petroleum products and substances that are regarded as hazardous under applicable laws or that, if spilled, could reach waterways, wetlands, or groundwater; ● plant and wildlife protection, and historic and archeological site and cultural resource protection, that could limit or prohibit electric power generation, mining or exploration; ● restricting the types, quantities, and concentration of materials that can be released into the environment in the performance of electric power generation, mining, exploration or production activities; ● discharge of materials; ● storage and handling of explosives; ● wetlands protection; ● surface subsidence from underground mining; and ● the effects, if any, that electric power generation or mining activities, including coal combustion residuals, have on groundwater quality and availability. 5 Table of Contents Failure to comply with environmental laws and regulations may result in the assessment of administrative, civil and criminal sanctions, including monetary penalties, the imposition of strict, joint and several liability, investigatory and remedial obligations, capital expenditures, interruptions, changes in operations, and the issuance of injunctions limiting or prohibiting some or all of the operations on our properties.
Added
In the following text, the terms “we,” “our,” “our company” and “us” may refer, as the context requires, to Hallador or collectively to Hallador and its subsidiaries. OVERVIEW General Hallador is a vertically integrated, independent power producer IPP and fuel company with operations primarily in Indiana.
Removed
The regulatory burden on fossil fuel industries increases the cost of doing business and consequently affects profitability.
Added
The Company operates across multiple stages of the energy supply chain, from accredited capacity and energy to coal. The Company’s electric operations are located within the MISO footprint.
Removed
The trend in environmental regulation has been to place more restrictions and limitations on activities that may affect the environment, and thus, any changes in environmental laws and regulations or re-interpretation of enforcement policies that result in more stringent and costly obligations could increase our costs and adversely affect our performance.
Added
Our operations comprise Hallador Power that provides accredited capacity and energy to utilities and other energy market participants through the MISO interconnection, and Sunrise that mines bituminous coal in Indiana to serve various power plants in the Midwest and Southeast United States.
Removed
In addition, the electric power industry is subject to extensive regulation regarding the environmental impact of its power generation activities, which has also adversely affected demand for coal.
Added
Operations Our business is organized based on the services and products we provide in two segments: (i) Electric Operations and (ii) Coal Operations. The Company also holds 50% interests in Sunrise Energy, LLC and Oaktown Gas, LLC, which are accounted for using the equity method. Through its operating subsidiaries, the Company delivers three main products to its customers. Accredited Capacity.
Removed
It is possible that new legislation or regulations may be adopted, that existing laws or regulations may be interpreted differently or more stringently enforced, that existing regulations may be repealed or that the authority of current regulators may be reduced or revoked, any of which could have a significant impact on our mining or electric power generating operations or our customers’ ability to use coal.
Added
Hallador Power, the Company’s wholly-owned electric subsidiary, owns and operates the Merom Power Plant (“Merom”), a 1,080 MW coal-fired power generating station, consisting of two steam turbine generators. Unit 1 entered commercial operations in 1982 and Unit 2 in 1983. The units are dispatched through its MISO interconnection.
Removed
For more information, please see “Recent Regulatory Developments from the Presidential Transition” in this section, below, and the risk factors described in “Item 1A. Risk Factors” below. We are committed to conducting electric power generating and mining operations in compliance with applicable federal, state, and local laws and regulations.
Added
In order to purchase energy through the MISO Interconnection, an end user must supply or purchase accredited capacity for an equivalent load.
Removed
However, because of the extensive and detailed nature of these regulatory requirements, including the regulatory system of the Mine Safety and Health Administration (“MSHA”), where citations can be issued without regard to fault and many of the standards include subjective elements, it is not reasonable to expect any electric power generating company or coal mining company to be free of citations.
Added
As accredited capacity is primarily available in large quantities from dispatchable sources of energy, such as natural gas and coal-fired power plants, Hallador Power sells accredited capacity to utilities and other energy market participants within the MISO system through PPAs and other bilateral transactions. 44 Table of Contents Energy.
Removed
When we receive a citation, we attempt to remediate any identified condition immediately. While we have not quantified all of the costs of compliance with applicable federal and state laws and associated regulations, those costs have been and are expected to continue to be significant.
Added
In addition to accredited capacity, Hallador Power sells wholesale energy to utilities, generation and transmission cooperatives, and other energy market participants within the MISO system through PPAs and other bilateral transactions, and sells on a spot basis in the day-ahead and real-time MISO markets. Coal. Sunrise, the Company’s wholly-owned mining subsidiary, mines coal from reserves found in the ILB.
Removed
Compliance with these laws and regulations has substantially increased the cost of electric power generation and the cost of coal mining for domestic coal producers. Expenditures for environmental matters have not been material in recent years.
Added
Coal mined by Sunrise is used as a primary fuel source for generating electricity at various power plants in the Midwest and Southeast United States.
Removed
We have accrued for the present value of the estimated cost of asset retirement obligations, power plant closing, and mine closings, including the cost of treating mine water discharge, when necessary.
Added
In addition, Sunrise has a developed infrastructure for the transport of coal, which is typically sold free on board from the shipping point, including rail networks and truck loading systems, facilitating the efficient movement of the resource from the mine to its customers.
Removed
The accruals for asset retirement obligations, power plant closing and mine closing costs are based upon permit requirements and the estimated costs and timing of asset retirement obligations and mine closing procedures.
Added
Sunrise’s Oaktown Mining Complex is about twenty miles from Merom, which is located in Sullivan County, Indiana, enabling Merom and Sunrise to take advantage of low-cost fuel on a delivered basis.
Removed
Although management believes it has made adequate provisions for all expected reclamation and other costs associated with mine closures, future operating results would be adversely affected if these accruals were insufficient. Electric Power Generation Permits and Approvals Numerous governmental permits or approvals are also required for electric power generation operations, including coal-fired power plants such as Merom Generating Station.
Added
In the first quarter of 2024, we announced a restructuring of our Coal Operations to address the increase in costs we experienced at our mines, that resulted in a significant reduction in headcount and the temporary idling of our mining operations at the Oaktown Mine No. 2.
Removed
Applications for permits require extensive engineering and data analysis and presentation and must address a variety of environmental, health, and safety matters associated with electric power generation. These matters include air emissions, including greenhouse gas emissions, the management and disposal of coal combustion residuals and other wastes or materials, and wastewater effluent treatment and discharge, among others.
Added
See “Note 19 – Impairment of Coal Properties” to the Consolidated Financial Statements in this Form 10-K for further information on the impairment analysis. Strategy and Management Focus We view our business as two integrated operations, “Electric Operations” (our gigawatt Merom power generating station), and “Coal Operations” (our coal mining and coal sales group).
Removed
Meeting all requirements imposed to address these matters may be costly and may delay or prevent commencement or continuation of power generation operations. The permitting process for electric power generation operations can extend over many years as a result of necessary permit renewals and those permitting decisions can be subject to administrative and judicial challenge, including by the public.
Added
We strive to achieve margin expansion through organic revenue growth and profitability in our operations by negotiating and fulfilling contracts for accredited capacity, wholesale energy, and thermal coal to utilities and other energy market participants.
Removed
We cannot assure you that we will not experience difficulty or delays in obtaining electric power generation permits in the future or that a current permit will not be revoked. 6 Table of Contents We are required to post bonds to secure performance under our coal combustion residuals landfill permit.
Added
We continue to monitor opportunities to expand the volume of our electric generation capabilities through expansion of existing facilities utilizing MISO’s ERAS program, or via acquisition. We continue to evaluate other strategic transactions that could add durability, scale, and geographic expansion opportunities to our Electric Operations.
Removed
Under some circumstances, substantial fines and penalties, including revocation of electric power generating permits, may be imposed under the laws and regulations described above and below. Monetary sanctions and, in severe circumstances, criminal sanctions may be imposed for failure to comply with these laws and regulations.
Added
While these types of deals are limited and complex, we believe that Hallador is well-positioned to transform retiring and/or underperforming assets into future opportunities. This will enable us to supply high demand end users, such as data centers and on-shored industrial customers, with minimal impact to retail consumers.
Removed
Although, like other power generating companies, we have been cited for violations in the ordinary course of our business, we have never had a permit suspended or revoked because of any violation, and the penalties assessed for these violations have not been material. Mining Permits and Approvals Numerous governmental permits or approvals are required for mining operations.
Added
In addition, we focus our organic capital investments on strategic maintenance projects to maintain our safe operational performance and improve the reliability of Merom. As discussed further under “Liquidity and Capital Resources — Capitalization” below, we also seek to maintain our debt at levels that provide for attractive equity returns without assuming undue risk.
Removed
Applications for permits require extensive engineering and data analysis and presentation and must address a variety of environmental, health, and safety matters associated with a proposed mining operation.
Added
Competition and Other External Factors We are experiencing competition in both our Electric and Coal Operations. This competition drives lower market prices for our products and services.
Removed
These matters include the manner and sequencing of coal extraction, the storage, use, and disposal of waste and other substances and impacts on the environment, the construction of water containment areas, and reclamation of the area after coal extraction.
Added
Competitors for our Electric Operations include other power generators who bid into the MISO interconnection, while competitors for our Coal Operations include other mining entities that are able to service our existing and potential customers via truck or rail within the Midwest and Southeast United States. 45 Table of Contents RESULTS OF OPERATIONS Our contracted forward sales for electricity, accredited capacity and coal are detailed below with estimated revenue from forward sales of $1.3 billion as of December 31, 2025.
Removed
Meeting all requirements imposed by any of these authorities may be costly and may delay or prevent commencement or continuation of mining operations. The permitting process for certain mining operations can extend over several years and can be subject to administrative and judicial challenge, including by the public.
Added
Forward Sales Position ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ Total Power ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Energy ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contracted MWh (in millions) ​ 4.06 ​ 3.06 ​ 1.09 ​ 0.27 ​ 8.48 Average contracted price per MWh ​ $ 43.32 ​ $ 46.50 ​ $ 52.94 ​ $ 51.33 ​ ​ ​ Contracted revenue (in millions) ​ $ 175.88 ​ $ 142.29 ​ $ 57.70 ​ $ 13.86 ​ $ 389.73 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accredited Capacity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average daily contracted accredited capacity MW ​ 733 ​ 623 ​ 454 ​ 100 ​ ​ Average contracted accredited capacity price per MWd ​ $ 230 ​ $ 226 ​ $ 225 ​ $ 230 ​ ​ ​ Contracted accredited capacity revenue (in millions) ​ $ 61.54 ​ $ 51.40 ​ $ 37.33 ​ $ 3.47 ​ $ 153.74 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Energy & Accredited Capacity Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contracted Power revenue (in millions) ​ $ 237.42 ​ $ 193.69 ​ $ 95.03 ​ $ 17.33 ​ $ 543.47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Priced tons - 3rd party (in millions) ​ 2.73 ​ 2.50 ​ 0.50 ​ — ​ 5.73 Avg price per ton - 3rd party ​ $ 55.72 ​ $ 56.74 ​ $ 59.00 ​ $ — ​ ​ ​ Contracted coal revenue - 3rd party (in millions) ​ $ 152.12 ​ $ 141.85 ​ $ 29.50 ​ $ — ​ $ 323.47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL CONTRACTED REVENUE (IN MILLIONS) - CONSOLIDATED ​ $ 389.54 ​ $ 335.54 ​ $ 124.53 ​ $ 17.33 ​ $ 866.94 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Priced tons - Intercompany (in millions) ​ 2.30 ​ 2.30 ​ 3.17 ​ — ​ 7.77 Avg price per ton - Intercompany ​ $ 51.00 ​ $ 51.00 ​ $ 51.00 ​ $ — ​ ​ ​ Contracted coal revenue - Intercompany (in millions) ​ $ 117.30 ​ $ 117.30 ​ $ 161.67 ​ $ — ​ $ 396.27 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL CONTRACTED REVENUE (IN MILLIONS) - SEGMENT ​ $ 506.84 ​ $ 452.84 ​ $ 286.20 ​ $ 17.33 ​ $ 1,263.21 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Actual revenue related to forward sales positions may differ materially for various reasons, including price adjustment features for coal quality and cost escalations, volume optionality provisions and potential force majeure events.
Removed
Some required mining permits are becoming increasingly difficult to obtain in a timely manner, or at all. We cannot assure you that we will not experience difficulty or delays in obtaining mining permits in the future or that a current permit will not be revoked. We are required to post bonds to secure performance under our permits.
Added
Discussion and Analysis of our Reportable Segments Our business is organized based on the services and products we provide in two segments: (i) Electric Operations and (ii) Coal Operations. The Chief Operating Decision Maker (“CODM”), who is the Company’s Chief Executive Officer, reviews and assesses operating performance measures related to our Electric Operations and our Coal Operations segments.
Removed
Under some circumstances, substantial fines and penalties, including revocation of mining permits, may be imposed under the laws and regulations described above. Monetary sanctions and, in severe circumstances, criminal sanctions may be imposed for failure to comply with these laws and regulations.
Added
In addition to these reportable segments, the Company has a “Corporate and Other and Eliminations” category, which is not significant enough, on a stand-alone basis, to be considered an operating segment.
Removed
Regulations also provide that a mining permit can be refused or revoked if the permit applicant or permittee owns or controls, directly or indirectly through other entities, mining operations that have outstanding environmental violations.
Added
Corporate and Other and Eliminations primarily consist of unallocated corporate costs and activities, including our 50% interests in Sunrise Energy, LLC, a private gas exploration company with operations in Indiana and Oaktown Gas, LLC, which we account for using the equity method. 46 Table of Contents Electric Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ ​ (in thousands) Delivered energy ​ $ 252,644 ​ $ 203,434 Accredited capacity revenue ​ ​ 58,093 ​ ​ 58,093 Electric sales ​ $ 310,737 ​ $ 261,527 ​ ​ ​ ​ ​ ​ ​ Fuel ​ $ (132,573) ​ $ (111,768) Other operating costs (1) ​ ​ (5) ​ ​ (19) Other operating and maintenance costs (2) ​ ​ (29,358) ​ ​ (28,622) Cost of purchased power ​ ​ (20,892) ​ ​ (10,888) Utilities ​ ​ (4,612) ​ ​ (2,070) Labor ​ ​ (32,672) ​ ​ (30,842) General and administrative ​ ​ (5,195) ​ ​ (5,311) Segment EBITDA ​ ​ 85,430 ​ ​ 72,007 Other operating revenue ​ ​ 3,534 ​ ​ 946 Depreciation, depletion and amortization ​ ​ (22,681) ​ ​ (19,290) ARO accretion ​ ​ (497) ​ ​ (457) Interest income ​ ​ 52 ​ ​ 36 Interest expense ​ ​ (9,097) ​ ​ (1,875) Income before Income Taxes ​ $ 56,741 ​ $ 51,367 1) Other operating costs primarily include costs for lime dust. 2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable as discussed above in (1). ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ ​ (per MWh) MWh generated (in thousands) ​ ​ 4,696 ​ ​ 3,830 MWh purchased (in thousands) ​ ​ 479 ​ ​ 354 MWh sold (in thousands) ​ ​ 5,175 ​ ​ 4,184 ​ ​ ​ ​ ​ ​ ​ Delivered energy ​ $ 48.82 ​ $ 48.62 Accredited capacity revenue ​ ​ 11.23 ​ ​ 13.88 Electric sales ​ $ 60.05 ​ $ 62.50 ​ ​ ​ ​ ​ ​ ​ Fuel ​ $ (25.62) ​ $ (26.71) Other operating costs (1) ​ ​ — ​ ​ — Other operating and maintenance costs (2) ​ ​ (5.67) ​ ​ (6.84) Cost of purchased power ​ ​ (4.04) ​ ​ (2.60) Utilities ​ ​ (0.89) ​ ​ (0.49) Labor ​ ​ (6.31) ​ ​ (7.37) General and administrative ​ ​ (1.00) ​ ​ (1.27) Segment EBITDA ​ ​ 16.52 ​ ​ 17.22 Other operating revenue ​ ​ 0.68 ​ ​ 0.23 Depreciation, depletion and amortization ​ ​ (4.38) ​ ​ (4.61) ARO accretion ​ ​ (0.10) ​ ​ (0.11) Interest income ​ ​ 0.01 ​ ​ 0.01 Interest expense ​ ​ (1.76) ​ ​ (0.45) Income (Loss) before Income Taxes ​ $ 10.97 ​ $ 12.29 1) Other operating costs primarily include costs for lime dust. 2) Other operating and maintenance costs include all other operating and maintenance costs with the exceptions of those costs considered variable as discussed above in (1). 47 Table of Contents Segment operating revenues from electric operations increased $49.2 million, or 18.8%, compared to 2024 attributable to an increase in sales of delivered energy while accredited capacity revenue was stable.
Removed
Although, like other coal companies, we have been cited for violations in the ordinary course of our business, we have never had a permit suspended or revoked because of any violation, and the penalties assessed for these violations have not been material.
Added
Our electric operations generated an additional 0.9 million MWh and purchased an additional 0.1 million MWh for resale resulting in incremental energy sales of 1.0 million MWh, an increase of 23.7% compared to 2024.
Removed
Mine Health and Safety Laws The Federal Mine Safety and Health Act of 1977 (“FMSHA”) and regulations adopted pursuant thereto, imposes extensive and detailed safety and health standards on numerous aspects of mining operations, including training of mine personnel, mining procedures, blasting, the equipment used in mining operations, and numerous other matters.
Added
Seasonal weather in the first and third quarters of 2025 leading to incremental generation was offset by lower plant availability due to equipment issues at Merom in the fourth quarter impacting total MWh generated. The price per MWh was relatively flat year-over-year at $48.82 for 2025 compared to $48.62 for 2024.
Removed
MSHA monitors and rigorously enforces compliance with these federal laws and regulations. In addition, the states where we operate have state programs for mine safety and health regulation and enforcement.
Added
Accredited capacity revenue totaled $58.1 million for each of the years ended December 31, 2025 and 2024. Other operating revenue increased $2.6 million, or 273.6%, compared to 2024 attributable to the exclusivity payments received during the contractual negotiations for the future accredited capacity and energy generated at Merom.
Removed
Federal and state safety and health regulations affecting the coal mining industry are perhaps the most comprehensive and rigorous system in the United States (the “U.S.”) for the protection of employee safety and have a significant effect on our operating costs.
Added
Fuel costs on a segment basis increased $20.8 million, or 18.6%, from 2024. Fuel costs on a consolidated basis increased $15.3 million or 33.0%, from 2024. This increase is due to electricity generation increasing by 0.9 million MWh, or 22.6%.
Removed
Although many of the requirements primarily impact underground mining, our competitors in all of the areas in which we operate are subject to the same laws and regulations.
Added
We used an incremental 0.3 million tons in production on both a segment and consolidated basis compared to the prior year. We utilized approximately 0.1 million more tons produced at the Oaktown mining complex in 2025 compared to 2024.
Removed
FMSHA has been construed as authorizing MSHA to issue citations and orders pursuant to the legal doctrine of strict liability or liability without fault, and FMSHA requires the imposition of a civil penalty for each cited violation.
Added
The increase in demand for electric power was related to seasonal weather in the first and third quarters of 2025, which resulted in 0.6 million and 0.5 million incremental MWh respectively, compared to the same periods in 2024.
Removed
Negligence and gravity assessments, along with other factors, can result in the issuance of various types of orders, including orders requiring withdrawal from the mine or the affected area, and some orders can also result in the imposition of civil penalties. FMSHA also contains criminal liability provisions.
Added
The weather contributed to higher demand for natural gas in Indiana causing an increase in the average spot prices of $0.84 per thousand cubic feet, or 24.1% compared to 2024. Total fuel costs benefited from a slight decrease in the cost of coal consumed from $54.30 per ton in 2024 to $53.98 per ton in 2025.
Removed
For example, criminal liability may be imposed upon corporate operators who knowingly and willfully authorize, order, or carry out violations of the FMSHA or its mandatory health and safety standards. 7 Table of Contents The Federal Mine Improvement and New Emergency Response Act of 2006 (“MINER Act”) significantly amended the FMSHA, imposing more extensive and stringent compliance standards, increasing criminal penalties and establishing a maximum civil penalty for non-compliance, and expanding the scope of federal oversight, inspection, and enforcement activities.
Added
We also made an adjustment to coal inventory during the third quarter of 2025 as part of the Company’s routine inventory reconciliation process resulting in an increase in fuel costs of $2.6 million. Cost of purchased power increased $10.0 million, or 91.9%, from 2024.
Removed
Following the passage of the MINER Act, MSHA has issued new or more stringent rules and policies on a variety of topics, including: ● sealing off abandoned areas of underground coal mines; ● mine safety equipment, training, and emergency reporting requirements; ● substantially increased civil penalties for regulatory violations; ● training and availability of mine rescue teams; ● underground “refuge alternatives” capable of sustaining trapped miners in the event of an emergency; ● flame-resistant conveyor belts, fire prevention and detection, and use of air from the belt entry; and ● post-accident two-way communications and electronic tracking systems. ​ MSHA continues to interpret and implement various provisions of the MINER Act, along with introducing new proposed regulations and standards.
Added
W hen there is an outage at one of the generating units at Merom or energy hours at the Merom Hub are priced below our production cost, we have the option to make net hourly purchases of power in the MISO market to satisfy our obligations, which we record as cost of purchased power.
Removed
In 2014, MSHA began implementation of a finalized new regulation titled “Lowering Miners’ Exposure to Respirable Coal Mine Dust, Including Continuous Personal Dust Monitors.” The final rule implemented a reduction in the allowable respirable coal mine dust exposure limits, requires the use of sampling data taken from a single sample rather than an average of samples, and increases oversight by MSHA regarding coal mine dust and ventilation issues at each mine, including the approval process for ventilation plans at each mine, all of which increase mining costs.
Added
Approximately 47.0% of the 2025 net hourly purchases occurred in the fourth quarter as a result of the equipment issues. Utilities increased $2.5 million, or 122.8%, in 2025 compared to 2024. The change was attributable to increased production at Merom, as well as incremental billing for auxiliary power. Labor increased $1.8 million, or 5.9%, in 2025 versus 2024.
Removed
The second phase of the rule began in February 2016 and requires additional sampling for designated and other occupations using the new continuous personal dust monitor technology, which provides real-time dust exposure information to the miner.
Added
The increase in labor costs is attributable to year-over-year wage increases and the use of outsourced labor. Interest expense increased $7.2 million, or 385.2%. The increase in our interest expense relates to accretion on our prepaid delivered energy contracts that were entered into in October 2024, and various points in 2025.
Removed
Phase three of the rule began in August 2016 and resulted in lowering the current respirable dust level of 2.0 milligrams per cubic meter to 1.5 milligrams per cubic meter of air.
Added
Income before income taxes increased $5.4 million, or 10.5%, compared to 2024 and is attributable to the items described in the discussion above. 48 Table of Contents Coal Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ ​ (in thousands) Coal sales ​ $ 221,008 ​ $ 202,525 ​ ​ ​ ​ ​ ​ ​ Fuel ​ $ (2,088) ​ $ (2,851) Other operating and maintenance costs ​ ​ (99,883) ​ ​ (89,283) Utilities ​ ​ (12,189) ​ ​ (13,844) Labor ​ ​ (78,006) ​ ​ (85,322) General and administrative ​ ​ (8,712) ​ ​ (9,877) Segment EBITDA ​ ​ 20,130 ​ ​ 1,348 Other operating revenue ​ ​ 5,373 ​ ​ 2,559 Depreciation, depletion and amortization ​ ​ (18,465) ​ ​ (46,245) Asset impairment ​ ​ — ​ ​ (215,136) ARO accretion ​ ​ (1,267) ​ ​ (1,171) Exploration costs ​ ​ (216) ​ ​ (260) Gain (loss) on disposal or abandonment of assets, net ​ ​ 2,489 ​ ​ (1,629) Interest income ​ ​ 235 ​ ​ 197 Interest expense ​ ​ (7,799) ​ ​ (11,033) Settlement of litigation ​ ​ — ​ ​ (2,750) Income (Loss) before Income Taxes ​ $ 480 ​ $ (274,120) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ ​ (per ton) Tons sold ​ ​ 4,311 ​ 3,864 ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 51.27 ​ $ 52.41 ​ ​ ​ ​ ​ ​ ​ Fuel ​ $ (0.48) ​ $ (0.74) Other operating and maintenance costs ​ ​ (23.17) ​ ​ (23.11) Utilities ​ ​ (2.83) ​ ​ (3.58) Labor ​ ​ (18.09) ​ ​ (22.08) General and administrative ​ ​ (2.02) ​ ​ (2.56) Segment EBITDA ​ ​ 4.68 ​ ​ 0.34 Other operating revenue ​ ​ 1.25 ​ ​ 0.66 Depreciation, depletion and amortization ​ ​ (4.28) ​ ​ (11.97) Asset impairment ​ ​ — ​ ​ (55.68) ARO accretion ​ ​ (0.29) ​ ​ (0.30) Exploration costs ​ ​ (0.05) ​ ​ (0.07) Gain (loss) on disposal or abandonment of assets, net ​ ​ 0.58 ​ ​ (0.42) Interest income ​ ​ 0.05 ​ ​ 0.05 Interest expense ​ ​ (1.81) ​ ​ (2.86) Settlement of litigation ​ ​ — ​ ​ (0.71) Income (Loss) before Income Taxes ​ $ 0.13 ​ $ (70.96) ​ During 2024, we undertook an Organizational Restructuring of our Coal Operations.
Removed
Compliance with these rules can result in increased costs on our operations, including, but not limited to, the purchasing of new equipment and the hiring of additional personnel to assist with monitoring, reporting, and recordkeeping obligations.
Added
See “ Note 17 – Organizational Restructuring ” in the Consolidated Financial Statements for further information.
Removed
MSHA published a request for information regarding engineering controls and best practices to lower miners’ exposure to respirable coal mine dust, and the comment period closed in July 2022. It is uncertain whether MSHA will present additional proposed rules, or revisions to the final rule, following the closing of the comment period.
Added
The Organizational Restructuring provided better operating leverage for our Coal Operations as decreased labor costs were a significant driver of our improved performance. ​ 49 Table of Contents Segment operating revenue from coal operations increased $18.5 million, or 9.1%, versus 2024, despite only actively mining Oaktown Mine No. 1 during 2025.
Removed
MSHA has also published, and may continue to publish, various proposed and final rules or requests for information, which may result in additional rulemakings. For example, in June 2016, MSHA published a request for information on Exposure of Underground Miners to Diesel Exhaust.

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