HALLADOR ENERGY CO

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, including, but not limited to, environmental matters, contractual disputes, regulatory issues, personal injury, and employment claims. 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. While 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. 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. 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.