UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the quarterly period ended September 30, ~~2020~~2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from _____________ to _____________

Commission file number: 0-55402

Rocky Mountain Industrials, Inc. (formerly RMR Industrials, Inc.)

(Exact name of registrant as specified in its charter)

Nevada		46-0750094
(State or jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

4601 DTC Blvd., Suite 130

Denver, CO 80237

(Address of principal executive offices)

(720) 614-5213

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ◻ No ⌧

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ◻ No ⌧

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer 	Accelerated filer 
Non-accelerated filer ⌧	Smaller reporting company ☒
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

As of December 15, 2021, the registrant had 35,785,858 shares of Class A Common Stock, ~~4,822,332~~4,822,322 shares of Class B Common Stock outstanding and 118.5 shares of Preferred Stock outstanding.

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ROCKY MOUNTAIN INDUSTRIALS, INC.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are “forward-looking statements.” Forward-looking statements may include our statements regarding our goals, beliefs, strategies, objectives, plan, including product and service developments, future financial conditions, results or projections or current expectations. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes,” “estimates,” “intends,” “plan” “expects,” “may,” “will,” “should,” “predicts,” “anticipates,” “continues,” or “potential,” or the negative thereof or other variations thereon or comparable terminology, and similar expressions are intended to identify forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, achievements, or industry results, expressed or implied by such forward-looking statements. Such uncertainties and risks include those discussed in the “Risk Factors” and similar sections of our Annual Report on Form 10-K for the year ended March 31, ~~2020~~2021 and our other filings with the Securities and Exchange Commission, all of which are incorporated by reference herein. Forward-looking statements appear in Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as elsewhere in this Quarterly Report.

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events except as otherwise required by law.

Unless otherwise specified or required by context, as used in this Report, the terms “we,” ~~��our,~~“our,” “us” and the “Company” refers collectively to Rocky Mountain Industrials, Inc., (“RMI”) formerly RMR, Industrials, Inc., and its wholly/majority-owned subsidiaries, RMR Aggregates, Inc., RMR Logistics, Inc., and Rail Land Company, LLC. Unless otherwise indicated, the term “common stock” refers to shares of our Class A Common Stock and Class B Common Stock.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with generally accepted accounting principles in the United States (GAAP).

Table of Contents

CAUTIONARY NOTE REGARDING EXPLORATION STAGE STATUS

AND USE OF CERTAIN MINING TERMS

We are considered an “exploration stage” company under the U.S. Securities and Exchange Commission (“SEC”) Industry Guide 7, Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations (“Guide 7”), because we do not have reserves as defined under Guide 7. Reserves are defined in Guide 7 as that part of a mineral deposit which can be economically and legally extracted or produced at the time of the reserve determination. The establishment of reserves under Guide 7 requires, among other things, certain spacing of exploratory drill holes to establish the required continuity of mineralization and the completion of a detailed cost or feasibility study. Since we have no reserves as defined in Guide 7, we have not exited the exploration stage and continue to report our financial information as an exploration stage entity as required under relevant accounting principles. We will remain an exploration stage company under Guide 7 until such time as we demonstrate reserves in accordance with the criteria in Guide 7.

Since we have no reserves, we will expense all mine construction costs, even though these expenditures are expected to have a future economic benefit in excess of one year. We will also expense our reclamation and remediation costs at the time the obligation is incurred. Companies that have reserves and have exited the exploration stage typically capitalize these costs, and subsequently amortize them on a units-of-production basis as reserves are mined, with the resulting depletion charge allocated to inventory, and then to cost of sales as the inventory is sold. As a result of these and other differences, our financial statements will not be comparable to the financial statements of mining companies that have established reserves and have exited the exploration stage.

We use certain terms in this report such as “production,” “mining or processing activities,” and “mine construction.” Production means the estimated quantities (tonnage) delivered or shipped to our customers, which may result in disclosure of related limestone and dolomite sales. Mining or processing activities means the process of extracting limestone and dolomite from the earth and treating that material. Mine construction means work carried out to access areas in the mine containing limestone and dolomite, which principally includes road construction, ramp construction and ancillary activities. We use these terms in this report since we believe they are necessary and helpful for the reader to understand our business and operations. However, we caution you that we do not have reserves and therefore have not exited the exploration stage as defined in Guide 7, and our use of the terminology described above is not intended to indicate that we have established reserves or have exited the exploration stage for purposes of Guide 7. Furthermore, since we do not have reserves, we cannot provide any indication or assurance as to how long we will likely continue mining activities at our mine site or whether such activities will be profitable.

Table of Contents

ROCKY MOUNTAIN INDUSTRIALS, INC.

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS

	Condensed Consolidated Balance Sheets as of September 30, ~~2020~~2021 and March 31, ~~2020~~2021	5

	Condensed Consolidated Statements of Operations for the three and six months ended September 30, ~~2020~~2021 and ~~2019~~2020	6

	Statement of Changes in Stockholder Equity for the three months ended September 30, ~~2020~~2021 and ~~2019~~2020	7

	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, ~~2020~~2021 and ~~2019~~2020	9

	Notes to Condensed Consolidated Financial Statements	10

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2019

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2221

ITEM 4.	CONTROLS AND PROCEDURES	2221

PART II – OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	2322

ITEM 1A.	RISK FACTORS	2322

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2322

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2322

ITEM 4.	MINE SAFETY DISCLOSURES	2322

ITEM 5.	OTHER INFORMATION	2322

ITEM 6.	EXHIBITS	2423

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ROCKY MOUNTAIN INDUSTRIALS, INC.

Condensed Consolidated Balance Sheets (Unaudited)

September 30,

March 31,


2020

2020
ASSETS




Current assets




Cash

$
1,077,265

$
57,240
Accounts receivable

59,248

80,180
Inventory

—

9,520
Prepaid expenses

197,288

388,953
Restricted cash

226,229

217,500
Assets held for sale

205,204

2,674,941
Total current assets

1,765,234

3,428,334

Property, plant, and equipment, net

2,812,479

2,973,221
Land under development

7,510,052

6,800,616
Right of use asset

380,401

519,754
Asset retirement obligation, net

78,414

62,195
Other intangibles, net

70,916

68,191
Deposits and other assets

313,378

56,785
Total assets

$
12,930,874

$
13,909,096

LIABILITIES AND STOCKHOLDERS’ EQUITY




Current liabilities




Accounts payable

$
1,288,981

$
1,223,995
Accounts payable, related party

Accrued liabilities

1,357,738

1,064,633
Accrued liabilities, related party

1,580,000

1,210,000
Capital lease payable, current

—

Dividends payable

536,156

140,032
Debt due within one year

3,302,390

1,756,654
Liabilities held for sale

1,102,690

2,363,203
Total current liabilities

9,167,955

7,758,517

Debt due after one year

655,348

250,000
Preferred shares debt

—

200,001
Lease liability

380,402

519,754
Accrued reclamation liability

114,018

108,701
Total liabilities

10,317,723

8,836,973

Commitments and Contingencies

Stockholders’ Equity




Preferred Stock Series A-1, $0.001 par value, 50,000,000 shares authorized: 48.27 and 43.27 shares issued and outstanding on September 30, 2020 and March 31, 2020, respectively

4,827,000

4,327,000
Preferred Stock Series A-2, $0.001 par value, 50,000,000 shares authorized: 19.45 and NaN issued and outstanding on September 30, 2020 and March 31, 2020, respectively

1,950,000

—
Preferred Stock Series A-3, $0.001 par value, 50,000,000 shares authorized: 50.75 and NaN issued and outstanding on September 30, 2020 and March 31, 2020, respectively

5,075,140

—
Class A Common Stock, $0.001 par value; 2,000,000,000 shares authorized; 35,785,858 shares issued and outstanding on September 30, 2020 and March 31, 2020

35,786

35,786
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 4,507,076 and 4,840,919 shares issued and outstanding on September 30, 2020 and March 31, 2020, respectively

4,508

5,277
Additional paid-in capital

47,198,292

49,276,203
Accumulated deficit

(56,477,575)

(48,572,143)
Total stockholders’ equity

2,613,151

5,072,123
Total liabilities and stockholders’ equity

$
12,930,874

$
13,909,096


	September 30,		March 31,
	2021		2021
ASSETS
Current assets
Cash	$	6,519,639	$	1,621,822
Accounts receivable		229,917		71,555
Other receivables		2,507,430		3,404,010
Inventory		11,420		0
Prepaid expenses		426,008		588,340
Restricted cash		185,405		185,325
Assets held for sale		0		5,000
Total current assets		9,879,819		5,876,052

Property, plant, and equipment, net		2,521,942		2,672,661
Land under development		7,707,006		6,929,630
Right of use asset		126,423		241,868
Asset retirement obligation, net		73,554		75,984
Other intangibles, net		58,950		64,933
Deposits and other assets		108,673		111,178
Total assets	$	20,476,367	$	15,972,306

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	571,777	$	610,216
Accrued liabilities		241,089		647,180
Accrued liabilities, related party		1,127,500		1,311,250
Dividends payable		1,484,326		1,008,942
Debt due within one year		5,920,927		4,474,082
Liabilities held for sale		0		423,853
Total current liabilities		9,345,619		8,475,523

Debt due after one year		475,117		952,059
Lease liability		126,423		241,868
Accrued reclamation liability		125,427		119,593
Total liabilities		10,072,586		9,789,043

Commitments and Contingencies

Stockholders’ Equity
Preferred Stock Series A-1, $0.001 par value, 50,000,000 shares authorized: 48.27 shares issued and outstanding on September 30, 2021 and March 31, 2021		4,827,000		4,827,000
Preferred Stock Series A-2, $0.001 par value, 50,000,000 shares authorized: 19.45 issued and outstanding on September 30, 2021 and March 31, 2021		1,950,000		1,950,000
Preferred Stock Series A-3, $0.001 par value, 50,000,000 shares authorized: 50.75 issued and outstanding on September 30, 2021 and March 31, 2021		5,075,140		5,075,140
Class A Common Stock, $0.001 par value; 2,000,000,000 shares authorized; 35,785,858 shares issued and outstanding on September 30, 2021 and March 31, 2021		35,786		35,786
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 4,777,332 and 4,687,332 shares issued and outstanding on September 30, 2021 and March 31, 2021, respectively		4,778		4,688
Additional paid-in capital		55,770,144		51,658,183
Accumulated deficit		(57,259,067)		(57,367,534)
Total stockholders’ equity		10,403,781		6,183,263
Total liabilities and stockholders’ equity	$	20,476,367	$	15,972,306

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ROCKY MOUNTAIN INDUSTRIALS, INC.

Condensed Consolidated Statements of Operations (Unaudited)


	Three months ended				Six months ended				For the three months ended				For the six months ended
	September 30,				September 30,				September 30,				September 30,
	2020		2019		2020		2019		2021		2020		2021		2020

Revenue	$	174,300	$	282,613	$	443,261	$	516,564	$	381,882	$	174,300	$	781,794	$	443,261
Cost of goods sold		152,990		216,121		343,668		543,117		370,960		152,990		655,853		343,668
Gross profit		21,310		66,492		99,593		(26,553)		10,922		21,310		125,941		99,593
Selling, general and administrative (includes depreciation, depletion and amortization for the three months ended of $78,568 in 2020 and $140,119 in 2019; and for the six months ended of $157,506 in September 2020 and $242,130 in September 2019)		3,051,235		2,858,228		5,965,605		5,703,835
Selling, general and administrative (includes depreciation, depletion and amortization for the three months ended of $74,145 in 2021 and $78,568 in 2020; and for the six months ended of $149,649 in September 2021 and $157,506 in September 2020)										3,113,199		3,051,235		5,923,648		5,965,605
Loss from operations		(3,029,925)		(2,791,736)		(5,866,012)		(5,730,388)		(3,102,277)		(3,029,925)		(5,797,707)		(5,866,012)
Gain on sale of assets		—		—		—		18,000		5,862,576		—		5,862,576		0
Other income										—		—		438,500		0
Interest income (expense), net		(215,151)		(76,088)		(333,801)		(141,593)		(156,408)		(215,151)		(319,517)		(333,801)

Loss before income tax provision		(3,245,076)		(2,867,824)		(6,199,813)		(5,853,981)		2,603,891		(3,245,076)		183,852		(6,199,813)
Income tax expense		—		—		—		—		—		—		—		0
Net loss from continuing operations		(3,245,076)		(2,867,824)		(6,199,813)		(5,853,981)
Net income (loss) from continuing operations										2,603,891		(3,245,076)		183,852		(6,199,813)

Loss from discontinued operations, net of tax		(898,250)		(253,110)		(1,309,495)		(203,295)
Net income (loss) from discontinued operations, net of tax										400,000		(898,250)		400,000		(1,309,495)

Net Loss		(4,143,326)		(3,120,934)		(7,509,308)		(6,057,276)
Net income (loss)									$	3,003,891	$	(4,143,326)	$	583,852	$	(7,509,308)

Add: Net loss attributed to noncontrolling interests		—		(156,047)		—		(303,366)
Earnings (loss) per shares - continuing operations - basic and diluted									$	0.42	$	(0.52)	$	0.03	$	(0.97)

Net loss attributable to Rocky Mountain Industrials, Inc.	$	(4,143,326)	$	(2,964,887)	$	(7,509,308)	$	(5,753,910)
Earnings (loss) per shares - discontinued operations - basic and diluted									$	0.06	$	(0.14)	$	0.06	$	(0.21)

Basic and diluted loss per share from continuing operations	$	(0.52)	$	(0.54)	$	(0.97)	$	(1.12)
Earnings (loss) per shares - basic									$	0.44	$	(0.70)	$	0.02	$	(1.24)

Basic and diluted loss per share from discontinued operations	$	(0.14)	$	(0.05)	$	(0.21)	$	(0.04)
Earnings (loss) per shares - diluted									$	0.37	$	(0.70)	$	0.01	$	(1.24)

Basic and diluted loss attributable to Rocky Mountain Industrials, Inc. per common share	$	(0.70)	$	(0.56)	$	(1.24)	$	(1.10)
Weighted average shares outstanding - basic										6,272,087		6,296,869		6,564,647		6,358,966

Weighted average shares outstanding		6,296,869		5,263,208		6,358,966		5,242,210
Weighted average shares outstanding - diluted										7,498,677		6,296,869		7,760,143		6,358,966

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ROCKY MOUNTAIN INDUSTRIALS, INC.

Statements of Changes in Stockholder Equity (Unaudited)

Preferred Stock

Additional

Common Stock Class A

Common Stock Class B

Series A-1

Paid-In

Accumulated

Noncontrolling


Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Interest

Total
Balance, March 31, 2019

35,785,858

$
35,786

4,032,752

$
4,033

0

$
0

$
42,102,106

$
(35,428,938)

$
99,212

$
6,812,198
Issuance of warrant for services

—

—

—

436

—

—

299,723

—

—

300,159
Issuance of common shares for subscription

—

—

75,000

75

—

—

1,499,925

—

—

1,500,000
Issuance of restricted common shares for compensation

—

—

37,000

37

—

—

(37)

—

—

—
Issuance of common stock for services

—

—

12,000

12

—

—

(12)

—

—

—
Stock-based compensation from stock options

—

—

—

—

—

—

750,029

—

—

750,029
Forfeiture of common stock

—

—

(53,500)

(54)

—

—

54

—

—

—
Net loss

—

—

—

—

—

—

—

(2,789,023)

(147,319)

(2,936,342)
Balance, June 30, 2019

35,785,858

35,786

4,103,252

4,539

0

0

44,651,787

(38,217,961)

(48,107)

6,426,044
Issuance of warrant for services

—

—

—

(85)

—

—

—

—

—

(85)
Issuance of Series A-1 Preferred shares

—

—

—

—

7.5

757,266

—

—

—

757,266
Issuance of common shares for subscription

—

—

100,000

100

—

—

1,624,900

—

—

1,625,000
Issuance of restricted common shares for compensation

—

—

85,000

85

—

—

(85)

—

—

—
Stock-based compensation from stock options

—

—

—

—

—

—

829,594

—

—

829,594
Net loss

—

—

—

—

—

—

—

(2,964,887)

(156,047)

(3,120,934)
Balance, September 30, 2019

35,785,858

$
35,786

4,288,252

$
4,639

7.5

$
757,266

$
47,106,196

$
(41,182,848)

$
(204,154)

$
6,516,885

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

~~Table of Contents~~

~~ROCKY MOUNTAIN INDUSTRIALS, INC.~~

~~Statements of Changes in Stockholder Equity (Unaudited)(Continued)~~


							Preferred Stock
	Common Stock Class A			Common Stock Class B			Series A-1				Series A-2				Series A-3				Additional		Accumulated
	Shares	Amount		Shares	Amount		Shares		Amount		Shares		Amount		Shares		Amount		Paid-In Capital		Deficit		Total
Balance, March 31, 2020	35,785,858	$	35,786	4,840,919	$	5,277		43.27	$	4,327,000		—	$	—		—	$	—	$	49,276,203	$	(48,572,143)	$	5,072,123
Issuance of Series A-1 Preferred shares for services	—		—	—		—		5.00		500,000		—		—		—		—		—		—		500,000
Series A-2 Preferred shares issued to settle preferred shares debt	—		—	—		—		—		—		2.00		200,000		—		—		—		—		200,000
Series A-2 Preferred shares issued to settle note payable	—		—	—		—		—		—		2.50		250,000		—		—		—		—		250,000
Issuance of Series A-2 Preferred shares	—		—	—		—		—		—		14.95		1,500,000		—		—		—		—		1,500,000
Exchange of Class B Common Stock for Series A-3 Preferred Shares	—		—	(338,343)		(338)		—		—		—		—		50.75		5,075,140		(5,074,802)		—		—
Issuance of restricted Class B Common stock for compensation	—		—	5,000		5		—		—		—		—		—		—		(5)		—		—
Other	—		—	—		(436)														436				—
Quarterly dividends on Series A-1 and A-2 Preferred shares	—		—	—		—		—		—		—		—		—		—		—		(157,132)		(157,132)
Stock-based compensation	—		—	—		—		—		—		—		—		—		—		1,295,104		—		1,295,104
Net loss	—		—	—		—		—		—		—		—		—		—		—		(3,365,982)		(3,365,982)
Balance, June 30, 2020	35,785,858		35,786	4,507,576		4,508		48.27		4,827,000		19.45		1,950,000		50.75		5,075,140		45,496,936		(52,095,257)		5,294,113
Issuance of Class B Common Shares upon exercise of warrants	—		—	2,500		3		—		—		—		—		—		—		31,247		—		31,250
Issuance of Class B Common shares for services	—		—	15,000		15		—		—		—		—		—		—		374,985		—		375,000
Forfeiture of Class B Common stock	—		—	(18,000)		(18)		—		—		—		—		—		—		18		—		—
Quarterly dividends on Series A-1 and A-2 Preferred shares	—		—	—		—		—		—		—		—		—		—		—		(238,992)		(238,992)
Stock-based compensation	—		—	—		—		—		—		—		—		—		—		1,295,106		—		1,295,106
Net loss	—		—	—		—		—		—		—		—		—		—		—		(4,143,326)		(4,143,326)
Balance, September 30, 2020	35,785,858	$	35,786	4,507,076	$	4,508		48.27	$	4,827,000		19.45	$	1,950,000		50.75	$	5,075,140	$	47,198,292	$	(56,477,575)	$	2,613,151

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ROCKY MOUNTAIN INDUSTRIALS, INC.

Statements of Changes in Stockholder Equity (Unaudited)(Continued)


							Preferred Stock
	Common Stock Class A			Common Stock Class B			Series A-1				Series A-2				Series A-3				Additional		Accumulated
	Shares	Amount		Shares	Amount		Shares		Amount		Shares		Amount		Shares		Amount		Paid-In Capital		Deficit		Total
Balance, March 31, 2021	35,785,858	$	35,786	4,687,332	$	4,688		48.27	$	4,827,000		19.45	$	1,950,000		50.75	$	5,075,140	$	51,658,183	$	(57,367,534)	$	6,183,263
Issuance of restricted Class B Common stock for compensation	—		—	140,000		140		—		—		—		—		—		—		(141)		—		(1)
Quarterly dividends on Series A-1 and A-2 Preferred shares	—		—	—		—		—		—		—		—		—		—		—		(236,393)		(236,393)
Stock-based compensation	—		—	—		—		—		—		—		—		—		—		1,691,651		—		1,691,651
Net loss	—		—	—		—		—		—		—		—		—		—		—		(2,420,039)		(2,420,039)
Balance, June 30, 2021	35,785,858		35,786	4,827,332		4,828		48.27		4,827,000		19.45		1,950,000		50.75		5,075,140		53,349,693		(60,023,966)		5,218,481
Issuance of Class B Common Shares upon exercise of warrants	—		—	20,000		20		—		—		—		—		—		—		(19)		—		1
Issuance of Class B Common shares for services	—		—	30,000		30		—		—		—		—		—		—		749,970		—		750,000
Forfeiture of Class B Common stock	—		—	(100,000)		(100)		—		—		—		—		—		—		100		—		—
Quarterly dividends on Series A-1 and A-2 Preferred shares	—		—	—		—		—		—		—		—		—		—		—		(238,992)		(238,992)
Stock-based compensation	—		—	—		—		—		—		—		—		—		—		1,670,400		—		1,670,400
Net income	—		—	—		—		—		—		—		—		—		—		—		3,003,891		3,003,891
Balance, September 30, 2021	35,785,858	$	35,786	4,777,332	$	4,778		48.27	$	4,827,000		19.45	$	1,950,000		50.75	$	5,075,140	$	55,770,144	$	(57,259,067)	$	10,403,781

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ROCKY MOUNTAIN INDUSTRIALS, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Six months ended				Six months ended
	September 30,				September 30,
	2020		2019		2021		2020
Cash flow from operating activities:
Net loss	$	(7,509,308)	$	(6,057,276)
Net income (loss)					$	583,852	$	(7,509,308)
Adjustments to reconcile net loss to net cash used in operating activities:
Operating and investing cash flows for discontinued operations		2,445,604		(579,148)		(418,853)		2,445,604
Depreciation, depletion and amortization expense		157,506		242,130		149,649		157,506
Stock-based compensation		2,590,210		1,880,322		3,362,051		2,590,210
Gain/loss on sale of assets						(5,839,126)		0
Amortization of debt discount		271,939		—		69,158		271,939
Accretion expense		5,317		18,117		5,834		5,317
Deferred rent		—		(39,898)
Debt forgiveness						(438,500)		0
Other						(1)		0
Changes in operating assets and liabilities:
Accounts receivable		20,932		(14,039)		(158,362)		20,932
Other receivables						896,580		0
Inventory		9,520		25,899		(11,420)		9,520
Prepaid expenses		191,665		(149,867)		162,332		191,665
Restricted cash		(8,729)		(72,800)		(80)		(8,729)
Deposits and other assets		(256,593)		34,057		2,505		(256,593)
Accounts payable		64,986		756,599		(38,439)		64,986
Accrued liabilities		293,105		97,192		(399,997)		293,105
Accrued liabilities, related parties		370,000		(130,000)		(183,750)		370,000
Net cash used in operating activities		(1,353,846)		(3,988,712)		(2,256,567)		(1,353,846)

Cash Flows from Investing Activities:
Acquisition of other intangibles		—		(23,693)
Proceeds from asset disposals						33,215		0
Investments in land under development		(334,436)		(742,425)		(2,178,053)		(334,436)
Reimbursement of land under development cost from Metro District						2,034,821		0
Proceeds from sale of water rights						5,931,250		0
Purchase of property, plant and equipment		(9,843)		—		0		(9,843)
Net cash used in investing activities		(344,279)		(766,118)
Net cash provided by (used in) investing activities						5,821,233		(344,279)

Cash Flows from Financing Activities:
Proceeds from note payable		3,788,500		1,291,695		2,104,483		3,788,500
Repayment of debt		(2,601,600)		(106,864)		0		(2,601,600)
Proceeds from issuance of Class B common stock		—		3,124,375
Repayment of notes payable						(771,332)		0
Proceeds from exercise of Class B common stock warrants		31,250		—		0		31,250
Proceeds from issuance of Series A-1 Preferred shares				965,113
Proceeds from issuance of Series A-2 Preferred shares		1,500,000		—		0		1,500,000
Net cash provided by financing activities		2,718,150		5,274,319
Net cash provided by (used in) financing activities						1,333,151		2,718,150

Net increase in cash		1,020,025		519,489		4,897,817		1,020,025

Cash at beginning of period		57,240		528,417		1,621,822		57,240
Cash at end of period	$	1,077,265	$	1,047,906	$	6,519,639	$	1,077,265

Supplemental cash flow information
Cash paid for interest	$	87,278	$	73,511	$	132,215	$	87,278
Cash paid for income taxes		—		—		0		0
Right of use Asset		—		374,357
Lease liability		—		(374,357)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ROCKY MOUNTAIN INDUSTRIALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

On January 1, 2020, the Company changed its name from RMR Industrials, Inc. to Rocky Mountain Industrials, Inc.

Rocky Mountain Industrials, Inc. (the “Company”, “RMI”, “we”, “our”, “us”) seeks to acquire and consolidate complementary industrial assets. RMI’s consolidation strategy is to assemble a portfolio of mature and value-add industrial commodities businesses to generate scalable enterprises with a broad portfolio of products and services addressing a common and stable customer base.

Formation

Online Yearbook was incorporated in the State of Nevada on August 6, 2012. Online Yearbook was a development stage company with the principal business objective of developing and marketing an online yearbook.

On November 17, 2014, Rocky Mountain Resource Holdings Inc., a Nevada Corporation (the “Purchaser”) became the majority shareholder of Online Yearbook, by acquiring 5,200,000 shares of common stock of Online Yearbook (the “Shares”), or 69.06% of the issued and outstanding shares of common stock, pursuant to stock purchase agreements with Messrs. El Maraana and Salah Blal. The Shares were acquired for an aggregate purchase price of $357,670. The Purchaser was the source of the funds used to acquire the Shares. In connection with Online Yearbook’s receipt of approval from the Financial Industry Regulatory Authority (“FINRA”), effective December 8, 2014, Online Yearbook amended its Articles of Incorporation to change its name from “Online Yearbook” to “RMR INDUSTRIALS, INC.”

On February 27, 2015 (the “Closing Date”), the Company entered into and consummated a merger transaction pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, OLYB Acquisition Corporation, a Nevada corporation and wholly owned subsidiary of the Company (“Merger Sub”) and RMR IP, Inc., a Nevada corporation (“RMR IP”). In accordance with the terms of Merger Agreement, on the Closing Date, Merger Sub merged with and into RMR IP (the “Merger”), with RMR IP surviving the Merger as our wholly owned subsidiary.

For financial reporting purposes, the Merger represented a “reverse merger” rather than a business combination and RMR IP was deemed to be the accounting acquirer in the transaction. Consequently, the assets and liabilities and the historical operations reflected in the Company’s financial statements post-Merger are those of RMR IP. The Company’s assets, liabilities and results of operations have been consolidated with the assets, liabilities and results of operations of RMR IP after consummation of the Merger, and the historical financial statements of the Company before the Merger were replaced with the historical financial statements of RMR IP before the Merger in all post-Merger filings with the SEC.

On January 3, 2017, we amended the Articles of Incorporation of RMR IP, Inc. to rename the corporation to RMR Logistics, Inc. (“RMR Logistics”). RMR Logistics operates as a wholly-owned subsidiary of the Company to provide transportation and logistics services.

On July 28, 2016, we formed RMR Aggregates, Inc., a Colorado corporation (“RMR Aggregates”), as our wholly owned subsidiary. RMR Aggregates was formed to hold assets whose primary focus is the mining and processing of industrial minerals for the manufacturing, construction and agriculture sectors. These minerals include limestone, aggregates, marble, silica, barite and sand.

On October 12, 2016, RMR Aggregates acquired substantially all of the assets from CalX Minerals, LLC, a Colorado limited liability company (“CalX”) through an Asset Purchase Agreement. Pursuant to the terms of the Asset Purchase Agreement, RMR Aggregates agreed to purchase, and CalX agreed to sell, substantially all of the assets associated with the Mid-Continent Quarry on 41 BLM unpatented placer mining claims in Garfield County, Colorado, including the

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mining claims, improvements, access rights, water rights, equipment, inventory, contracts, permits, certain intellectual property rights, and other tangible and intangible assets associated with the limestone mining operation.

During January 2018, the Company formed Rail Land Company, LLC (“Rail Land Company”) as a wholly-owned subsidiary to acquire and develop a rail terminal and services facility (the “Rail Park”). Rail Land Company purchased an approximately 470-acre parcel of real property located in Bennett, Colorado on February 1, 2018. During July 2018, we exercised our option to acquire an additional approximately 150 acres for a total of approximately 620 acres.

On April 26, 2019, RMR Logistics entered into an asset purchase agreement with H2K, LLC, a Colorado limited liability company (“the Seller”) pursuant to which RMR Logistics acquired the Seller’s trucking assets. In April 2020, the Company began the shutdown of substantially all the operations of RMR Logistics with the closure of its Wellington, Colorado location and the disposal of its operational assets through auction.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the accounting policies described in the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended March 31, ~~2020,~~2021, (“~~2020~~2021 Form 10-K”) and should be read in conjunction with such consolidated financial statements and related notes. The ~~2020~~2021 year end consolidated balance sheet data included in the Form 10-Q filing was derived from the audited consolidated financial statements in our ~~2020~~2021 Form 10-K, but does not include all disclosures required by accounting principles generally accepted in the United States. The following notes to these interim consolidated financial statements highlight significant changes to the notes included in the March 31, ~~2020~~2021 audited consolidated financial statements included in our ~~2020~~2021 Form 10-K and present interim disclosures as required by the Securities and Exchange Commission.

Consolidation

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The condensed consolidated financial statements include the financial condition and results of operations of our wholly-owned subsidiaries, where intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that impact the reported amounts of assets, liabilities, and expenses, and disclosure of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from those estimated amounts and assumptions used in the preparation of the financial statements.

Fair Value Measurements

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair

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value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

- Level 1: Quoted market prices in active markets for identical assets or liabilities

- Level 2: Observable market-based inputs or inputs that are corroborated by market data

- Level 3: Unobservable inputs that are not corroborated by market data

The fair value of notes payable was ~~$5,326,003~~$6,418,934 and ~~$4,324,892~~$5,881,033 as of September 30, ~~2020~~2021 and March 31, ~~2020,~~2021, respectively.

~~Net Loss~~Earnings (loss) per Common Share

Basic ~~net loss~~earnings (loss) per common share is calculated by dividing the net ~~loss attributable to common stockholders, after deducting preferred dividends,~~income (loss) by the weighted average number of common shares outstanding during the period, without consideration offor the potentially dilutive effects of converting stock options or restricted stock purchase rights outstanding. Diluted ~~net loss~~earnings (loss) per common share is calculated by dividing ~~the~~ net ~~loss attributable to common stockholders~~income (loss) by the weighted average ~~number~~ of common shares outstanding during the period and the potential dilutive effects of stock options or restricted stock purchase rights outstanding during the period determined using the treasury stock method. In periods in which the Company reports a net loss, ~~attributable to common stockholders,~~ diluted ~~net loss~~earnings per share ~~attributable to common stockholders~~ is the same as basic ~~net loss~~earnings per share ~~attributable to common stockholders~~ since dilutive common shares are not assumed to have been issued, as their effect is anti-dilutive.

The dilutive effects of stock options, restricted stock awards and convertible securities of 1,226,540 and 1,195,496 equivalent common shares for the three and six months ended September 30, 2021, respectively, were included in weighted average shares outstanding – diluted.

Discontinued Operations

In April 2020, the Company began the shutdown and closing of operations located in Wellington, Colorado comprising substantially all the operations of RMR Logistics and the Logistics segment. The closing of the Wellington location was substantially complete in June, 2020. Substantially all of the mobile equipment was sold at auction in August of 2020 at a loss of $836,778. Auction proceeds received was approximately ~~$1,287,000~~$1,286,768 and was used to pay down debt.

In September 2021, the Company negotiated the forgiveness of the remaining $400,000 obligation related to the asset purchase agreement with H2K, LLC. The $400,000 forgiveness has been reflected as other income in the results from discontinued operations for the three and six months ended September 30, 2021.

Carrying amounts of major classes of assets and liabilities included in discontinued operations are comprised of the following as of:

September 30,

March 31,

2020

2020

Cash

$
—

$
1,800
Accounts Receivable

17,315

45,287
Property, plant and equipment, net

182,889

2,384,877
Goodwill

—

237,977
Other noncurrent assets

5,000

5,000
Total assets held for sale

$
205,204

$
2,674,941

Accounts payable and accrued liabilities

$
57,367

$
75,634
Debt

1,045,323

2,287,569
Total liabilities held for sale

$
1,102,690

$
2,363,203


	March 31,
	2021

Other noncurrent assets		5,000
Total assets held for sale	$	5,000

Accounts payable and accrued liabilities	$	23,853
Debt		400,000
Total liabilities held for sale	$	423,853

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Major line items comprising net ~~loss~~income (loss) from discontinued operations are comprised of the following:


		Three Months Ended September 30,				Six Months Ended September 30,				Three Months Ended September 30,				Six Months Ended September 30,
		2020		2019		2020		2019		2021		2020		2021		2020
Revenue	$	220	$	372,723	$	122,665	$	616,496	$	—	$	220	$	—	$	122,665
Cost of goods sold		(8,648)		(420,562)		(199,004)		(514,866)		—		(8,648)		—		(199,004)
		(8,428)		(47,839)		(76,339)		101,630		—		(8,428)		—		(76,339)
Selling, general and administrative (including depreciation and amortization)		39,551		164,176		368,161		245,756		—		39,551		—		368,161
Other income										400,000		—		400,000		—
Interest expense, net		13,493		30,990		28,217		49,064		—		13,493		—		28,217
Loss on sales of fixed assets		(836,778)		(10,105)		(836,778)		(10,105)		—		(836,778)		—		(836,778)
Net loss from discontinued operations	$	(898,250)	$	(253,110)	$	(1,309,495)	$	(203,295)
Net income (loss) from discontinued operations									$	400,000	$	(898,250)	$	400,000	$	(1,309,495)

~~3. GOING CONCERN~~

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to applicable laws and regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business. However, the Company does not have sufficient cash or other current assets, nor does it have an established and adequate source of revenues, to cover its operating costs and to allow it to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the business plan and eventually attain profitable operations. During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company may experience a cash shortfall and be required to raise additional capital.

Historically, the Company has mostly relied upon funds from the sale of shares of stock and from acquiring loans to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.

In the past year, the Company funded operations by using cash proceeds received through the issuance of common and preferred stock and proceeds from debt financing. For the coming year, the Company plans to continue to fund the Company through debt and securities sales and issuances until the company generates enough revenues through the operations as stated above.

~~The Company is currently working through a number of opportunities to ensure the business will continue as a going concern. These include:~~

~~The development of the Rail Park will generate sustained annual revenues by providing transloading services and realized gains on the sale of land while limiting future capital development costs.~~

~~Expansion of the Mid-Continent Quarry, which will allow greater volume production with limited fixed cost increases.~~

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4.3. INVENTORY

Inventory, for which there was none as of ~~September 30, 2020,~~March, 31, 2021, is valued at the lower of cost (average) or market.


	March 31,		September 30,
	2020		2021

Blasted Rock	$	2,316	$	11,420
Packaging		7,204		—
Total	$	9,520	$	11,420

5.4. PROPERTY, PLANT AND EQUIPMENT

The following summarizes the Company’s property, plant and equipment as of:


	September 30,		March 31,		September 30,		March 31,
	2020		2020		2021		2021
Recoverable Limestone	$	1,477,469	$	1,477,470	$	1,477,469	$	1,477,469
Mill Equipment		1,289,113		1,273,395		1,229,987		1,229,988
Mining Equipment		336,934		336,934		336,934		336,934
Mobile Equipment		813,965		813,975		827,157		844,664
Other		78,972		78,972		78,973		78,973
Total		3,996,453		3,980,746		3,950,520		3,968,028
Less: Accumulated Depreciation		(1,183,974)		(1,007,525)		(1,428,578)		(1,295,367)
Property, plant and equipment, net	$	2,812,479	$	2,973,221	$	2,521,942	$	2,672,661

6.5. NOTES PAYABLE

On September 9, 2020, Company, executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the United States Small Business Administration (the “SBA”) under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the EIDL Loan is $150,000, with proceeds to be used for working capital purposes. Interest on the EIDL Loan accrues at the rate of 3.75% per annum and installment payments, including principal and interest, are due monthly beginning twelve months from the date of the EIDL Loan in the amount of $731. The balance of principal and interest is payable thirty years from the date of the promissory note. In connection with the EIDL Loan, the Company executed the EIDL Loan documents, which include the SBA Secured Disaster Loan Note, dated September 9, 2020, the Loan Authorization and Agreement, dated September 9, 2020, and the Security Agreement, dated September 9, 2020, each between the SBA and the Company.

On July 24, 2020, Rail Land Company executed a Term Loan Promissory Note, primarily secured by the underlying property of the Rail Park (“Secured Promissory Note”), with a private lender for $2,450,000. The Secured Promissory Note matures on July 31, 2021, and accrues interest at 10% per annum. RMI is a guarantor of the Secured Promissory Note.

In April and June 2020, the Company executed 2 unsecured note agreements with an investor totaling $1,000,000. The unsecured notes are carried net of original issue discount (10%), which is being amortized on a straight line basis, which approximates the effective interest method. In April 2021, the maturity dates of the 2 notes, with a then total outstanding accreted balance of $861,111 were extended to May 1, 2022.

In March 2020, the federal government passed the Coronavirus Aid, Relief, and Security Act (the "CARES Act"), which provided among other things the creation of the Paycheck Protection Plan ("PPP"), which is sponsored and administered by the U.S. Small Business Administration ("SBA"). On April 20, 2020, the Company executed a loan agreement (the "PPP Loan") under the PPP, evidenced by promissory notes, with Simmons Bank ("Simmons"), providing for $438,500 in proceeds, which was funded to the Company on April 24, 2020. In June 2020, the Paycheck Protection Program

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Flexibility Act of 2020 (the "PPPFA") was signed into law and established the payment dates in the event that amounts borrowed under the PPP are not forgiven. The PPP Loans mature April 20, 2022, but may be forgiven subject to the terms of the PPP and approval by the SBA. The Company recorded the PPP Loan as a debt obligation and accrues interest over the term of the PPP Loan. The interest rate on the PPP Loan is 1.00%. The PPP Loan is unsecured and contains customary events of default relating to, among other things, payment defaults, making materially false and misleading representations to the SBA or Simmons, or breaching the terms of the PPP Loan. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company. Under the PPPFA, monthly payments of principal and interest commence on the later of 10 months following the "covered period" (as defined in the PPPFA) or the date that Simmons notifies the Company that the SBA has notified Simmons that all or a portion of the PPP Loan has not been forgiven.

In May 2021, the Company submitted its applications to the SBA for forgiveness of the PPP Loans. ~~As of September 30, 2021, the PPP Loan principal and accrued interest are classified as noncurrent in the Condensed Consolidated Balance Sheets.~~ In June 2021, the Company received formal notification in the form of a letter dated May 25, 2021, from Simmons that the SBA approved the Company’s PPP Loan forgiveness applications for the Company’s Loan in the amount of $438,500 (including accrued interest). The ~~Company will account for the~~ debt forgiveness ~~during its fiscal first quarter ending June 30,2022, and will recognize~~resulted in the recognition of a gain on extinguishment of debt (other income) in the amount of $438,500 in the Consolidated Statements of Operations ~~for~~in the ~~respective quarter.~~ three month period ended June 30, 2021.


											Effective
	September 30, 2020		March 31, 2020		Effective Interest Rate	Maturity Date	September 30, 2021		March 31, 2021		Interest Rate	Maturity Date
Equipment loans	$	152,305	$	191,530	2.10% - 6.30%	August 25, 2021 - January 22, 2023
Equipment Loan							$	58,437	$	122,248	2.10% - 6.30%	August 25, 2021 - January 22, 2023
Secured promissory note		2,450,000		—	10.00%	July 31, 2021		5,002,746		3,582,183	12.00%	March 5, 2022
Senior unsecured note		—		1,247,268	25.00%	April 4, 2020
Term loan		367,721		1,297,014	3.69%	July 21, 2020
Unsecured notes		1,462,710		967,856	10.00%	April 3, 2021 - June 30, 2021		887,580		1,250,424	10.00%	May 1, 2022
Lines of credit		304,767		621,224	5.750%	May 6, 2020
Promisory notes								314,077		337,678	1.09%	January 1, 2025
Secured disaster loan (SBA)								156,094		150,000	3.75%	September 9, 2050
Promissory notes (PPP loan)		438,500		—	1.00%	April 20, 2022				438,500	1.00%	April 20, 2022
Secured disaster loan (SBA)		150,000		—	3.75%	September 9, 2050
		5,326,003		4,324,892				6,418,934		5,881,033
Unamortized debt issuance cost		(322,942)		(30,669)				(22,890)		(54,892)
		5,003,061		4,294,223				6,396,044		5,826,141
Discontinued operations		(1,045,323)		(2,287,569)				—		(400,000)
Less: current portion		(3,302,390)		(1,756,654)				(5,920,927)		(4,474,082)
Debt due after one year	$	655,348	$	250,000			$	475,117	$	952,059

7.6. TRANSACTIONS WITH RELATED PARTIES

As of September 30, ~~2020,~~2021, the Company has accrued ~~$1,580,000~~$1,127,500 for unpaid officers’ compensation expense in accordance with consulting agreements with our Non-executive Board Chairman and Chief Executive Officer. Under the terms of each consulting agreement, each consultant shall serve as an executive officer to the Company and receive monthly compensation of $35,000. The consulting agreements may be terminated by either party for breach or upon thirty days prior written notice.

8.7. SHAREHOLDERS’ EQUITY

Preferred Stock

The Company has authorized 50,000,000 shares of preferred stock for issuance. In April 2021, the Board of Directors of the Company authorized 118.47 shares as Series A Preferred Stock and designated 48.27 as Series A-1 Convertible

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Preferred Stock, designated 19.45 as Series A-2 Convertible Preferred Stock and designated 50.75 as Series A-3 Convertible Preferred Stock (collectively referred to as “Series A Preferred Stock”). The Series A Preferred Stock is senior, with respect to dividend rights and to rights upon any voluntary or involuntary liquidation, dissolution or winding

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up of the Company (each, a "Liquidation Event") in preference and priority to the Class A Common Stock and Class B Common Stock of the Company.

Voting Rights

Series A Preferred Stock is entitled to vote on all matters submitted to a vote of the stockholders of the Company together with the holders of Class B Common Stock and is entitled to that number of votes equal to the number of shares of Class B Common Stock into which the holder's shares of Series A Preferred Stock could then be converted.

Dividends

Series A-1 Preferred Stock and Series A-2 Preferred Stock, accrue dividends at the rate per annum of $8,000 (“Accruing Dividends”), subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock, whether or not declared, and shall be cumulative. The Company shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Company (other than dividends on shares of Class B Common Stock payable in shares of Class B Common Stock) unless the holders of the Series A-1 Preferred Stock and Series A-2 Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A-1 Preferred Stock and Series A- 2 Preferred Stock in an amount at least equal to the sum of (i) the amount of the aggregate Accruing Dividends then accrued on such share of Series A-1 Preferred Stock or Series A-2 Preferred Stock (as applicable) and not previously paid and (ii) in the case of a dividend on Class B Common Stock or any class or series that is convertible into Class B Common Stock, that dividend per share of Series A-1 Preferred Stock or Series A-2 Preferred Stock (as applicable) as would equal the product of (l) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Class B Common Stock and (2) the number of shares of Class B Common Stock issuable upon conversion of a share of Series A-I Preferred Stock or Series A-2 Preferred Stock (as applicable), in each case calculated on the record date for determination of holders entitled to receive such dividend. Series A-3 Preferred Stock does not accrue dividends.

Liquidation Preference

In the event of any Liquidation Event, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, and in the event of a Deemed Liquidation Event (as defined below), the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the available proceeds, as applicable, before any payment shall be made to the holders of Common Stock. A Deemed Liquidation Event is defined as a merger or consolidation in which a change of control of the Company has occurred or the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole.

Conversion

Series A Preferred Stock is convertible, at the option of the holder, into a number of shares of Class B Common Stock determined by dividing (i) the sum of the Series A Original Issue Price and all then-unpaid Accruing Dividends by (ii) the respective conversion price in effect at the time of conversion. The Series A-1 Preferred Stock conversion price is $25.00 per share, the Series A-2 Preferred Stock conversion price is $21.00 per share and the Series A-3 Preferred Stock conversion price is $15.00 per share.

In the event of an underwritten public offering, public uplist, or qualified equity issuance of at least $10,000,000 in gross proceeds and a minimum price per share of $25.00 for the Company's Common Stock (“Qualified Offering”), Series A

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Preferred Stock shall automatically be converted into such number of fully paid and non-assessable shares of Class B Common Stock at the then effective conversion rate as noted above.

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Common Stock

The Company has authorized 2,100,000,000 shares of common stock for issuance, including 2,000,000,000 shares of Class A Common Stock and 100,000,000 shares of Class B Common Stock.

The holders of Class A Common Stock have the right to vote on all matters on which stockholders have the right to vote. The holders of Class B Common Stock have the right to vote solely on matters where the vote of such holders is explicitly required under Nevada law. The holders of Class A Common Stock and Class B Common stock have equal distribution rights, provided that distributions in securities shall be made in either identical securities or securities with similar voting characteristics. The holders of Class A Common Stock and Class B Common Stock are entitled to receive identical per-share consideration upon a merger, conversion or exchange of the Company with another entity, and have equal rights upon a dissolution, liquidation or winding-up of the Company.

9.8. SHARE-BASED COMPENSATION

The RMR Industrials, Inc. 2015 Equity Incentive Plan (the “2015 Plan”) authorizes the issuance of up to 30% of the outstanding shares of Common Stock at any time pursuant to awards made by the Company’s board of directors. As of September 30, ~~2020,~~2021, there were ~~1,592,436~~856,714 shares still available for future issuance under the 2015 Plan.

Stock Options

The Company grants stock options to certain employees that give them the right to acquire our Class B common stock under the 2015 Plan. The exercise price of options granted is equal to the closing price per share of our stock at the date of grant. The nonqualified options vest at a rate of 33% on each of the first three anniversaries of the grant date provided that the award recipient continues to be employed by us through each of those vesting dates and expire ten years from the date of grant.

~~10.~~9. SEGMENT REPORTING

For ~~the three six months ended September 30, 2020, the Company has 2 reportable segments: Aggregates and Rail Park. The Company had 3 reportable segments for~~ the three and six months ended September 30, ~~2019:~~2021 and 2020, the Company has 2 reportable segments: Aggregates ~~Logistics~~ and Rail Park. The Aggregates segment produces chemical grade lime for use in the aggregates market. ~~The Logistics segment was shutdown in April 2020, and its results of operations have been included in discontinued operations.~~ The Rail Park segment consists of land under development to provide a rail terminal and services facility and currently ~~has~~have no operational activity. The Rail Park will require significant future capital investment before the segment starts generating recurring revenue. The ~~Company expects that the~~ Rail Park development ~~will commence~~commenced in the first half of calendar year 2021.

The Aggregates segment has a3 major ~~customer,~~customers, a mining operation (“Mine”) and 2 construction companies (“Construction A and B”), that accounted for approximately ~~80%~~21%, 21% and ~~86%~~47% of Aggregates segment revenue for the three ~~and six~~ months ended September 30, 2020, respectively. Mine, Construction A and Construction B accounted for approximately 21%, 21% and 25%, of Aggregate segment revenues for the six months ended September 30, 2021, respectively.

As of September 30, 2020, ~~the Mine~~Construction A accounted for approximately ~~74%~~ 70% and an additional construction company accounted for approximately 15% of ~~our~~ Aggregates segment accounts receivable ~~balance.~~balance, respectively.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on profit or loss from operations before income taxes not including nonrecurring gains and losses.

The Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices.

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~~The Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices.~~

The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. All assets are held and all operating activities occur within the United States.

Three months ended September 30, 2020

Six months ended September 30, 2020
Description

Aggregates

Rail Park

Other/Corporate

Total


Aggregates

Rail Park

Other/Corporate

Total
Revenue
$
174,300
$
—
$
—
$
174,300

$
443,261
$
—
$
—
$
443,261
Gross profit

21,310

—

—

21,310

99,593

—

—

99,593
Selling, general and administrative

193,558

—

2,857,677

3,051,235

632,179

—

5,333,426

5,965,605
Property, plant and equipment, net

2,750,867

—

61,612

2,812,479

2,750,867

—

61,612

2,812,479
Land under development

—

7,497,146

12,906

7,510,052

—

7,497,146

12,906

7,510,052

~~The September 30, 2019 segment information has not been retroactively adjusted to reflect the impact of discontinued operations.~~


		Three months ended September 30, 2021								Six months ended September 30, 2021
		Aggregates		Rail Park		Other/Corporate		Total		Aggregates		Rail Park		Other/Corporate		Total
Revenue	$	381,882	$	—	$	—	$	381,882	$	781,794	$	—	$	—	$	781,794
Gross profit		10,922		—		—		10,922		125,941		—		—		125,941
Selling, general and administrative		145,356		—		2,967,843		3,113,199		285,990		—		5,637,658		5,923,648
Property, plant and equipment, net		2,494,917		—		27,025		2,521,942		2,494,917		—		27,025		2,521,942
Land under development		—		7,707,006		—		7,707,006		—		7,689,561		17,445		7,707,006

Three months ended September 30, 2019

Six months ended September 30, 2019
Description

Aggregates

Logistics

Rail Park

Other

Total


Aggregates

Logistics

Rail Park

Other

Total
Revenues from external customers
$
267,575
$
488,111
$
—
$
(100,350)
$
655,336

$
501,525
$
813,572
$
—
$
(182,037)
$
1,133,060
Intersegment revenues

(100,348)

100,348

—

—

—

(182,037)

182,037

—

—

—
Interest expense

1,113

31,825

—

74,139

107,077

2,367

50,821

—

137,468

190,656
Depreciation, depletion and amortization

70,752

100,731

—

976

172,459

143,931

158,909

—

1,278

304,118
Segment loss

461,069

282,408

14,831

2,352,591

3,110,899

944,390

334,357

21,604

4,756,925

6,057,276
Segment assets

4,158

442,701

213,776

403,093

1,063,728

3,599,439

3,175,151

6,036,901

1,564,995

14,376,486
Expenditure for segment assets

—

433,099

—

—

433,099

—

2,704,124

—

—

2,704,124


		Three months ended September 30, 2020								Six months ended September 30, 2020
		Aggregates		Rail Park		Other/Corporate		Total		Aggregates		Rail Park		Other/Corporate		Total
Revenue	$	174,300	$	—	$	—	$	174,300	$	443,261	$	—	$	—	$	443,261
Gross profit		21,310		—		—		21,310		99,593		—		—		99,593
Selling, general and administrative		193,558		—		2,857,677		3,051,235		632,179		—		5,333,426		5,965,605
Property, plant and equipment		2,750,867		—		61,612		2,812,479		2,750,867		—		61,612		2,812,479
Land under development		—		7,497,146		12,906		7,510,052		—		7,497,146		12,906		7,510,052

Land Under Development

In 2018, the Company formed the Rocky Mountain Rail Park Metropolitan District (“District”) for the purpose of financing public improvements related to the development of approximately 620 acres, including open space and other right-of-way areas and providing ongoing operations and maintenance services related to the public improvements. Public improvements are generally, any part or all of the public improvements authorized to be planned, designed, acquired, constructed, installed, relocated, redeveloped, operated, maintained and/or financed, including necessary and appropriate landscaping, appurtenances and real property to effect such improvements, as generally described in the Colorado Special District Act (Title 32, Article 1, Colorado Revised Statutes) and as may be necessary to serve the future taxpayers and inhabitants of the District, as determined by the District Board, including public improvements within and without the District’s boundaries.

~~11.~~

In April 2021, the District closed on its Limited Tax General Obligation and Water Revenue Bonds, Series 2021A and 2021B (“Tax -Exempt Bonds”) raising total proceeds of approximately $65.2 million, approximately $51.2 million of which will be directly used to fund the public improvements. The Tax - Exempt Bonds are an obligation of the District and not of the Company and will be repaid through ownership taxes and other enterprise revenues collected by the District from property owners residing in the District.

Water Rights

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gain on sales of assets of approximately $5.8 million, which was recognized in the consolidated statement of operation for the quarter ended September 30, 2021.

10. COMMITMENTS AND CONTINGENCIES

Accrued Reclamation Liability

The Company incurs reclamation liabilities as part of its mining activities. Quarry activities require the removal and relocation of significant levels of overburden to access materials of usable quantity and quality. The same overburden material is used to reclaim depleted mine areas, which must be sloped to a certain gradient and seeded to prevent erosion in the future. Reclamation methods and requirements can differ depending on the quarry and state rules and regulations in existence for certain locations. As of September 30, ~~2020,~~2021, the Company’s undiscounted reclamation obligations totaled approximately $366,000. This obligation is expected to be settled within the next 20 years.

Reclamation costs resulting from the normal use of long-lived assets, either owned or leased, are recognized over the period the asset is in use. The obligation, which cannot be reduced by estimated offsetting cash flows, is recorded at fair value as a liability at the obligating event date and is accreted through charges to selling, general and administrative costs, inclusive of depreciation, depletion and amortization. The fair value is based on our estimate of the cost required for a third party to perform the legally required reclamation tasks including a reasonable profit margin. This fair value is also capitalized as part of the carrying amount of the underlying asset and depreciated over the estimated useful life of the asset.

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The mining reclamation reserve is based on management’s estimate of future cost requirements to reclaim property at its operating quarry site. Costs are estimated in current dollars and inflated until the expected time of payment using a future estimated inflation rate and then discounted back to present value using a credit-adjusted, risk-free rate on obligations of similar maturity adjusted to reflect our credit rating. The Company will review reclamation liabilities at least every three years for a revision to the cost or a change in the estimated settlement date. Additionally, reclamation liabilities are reviewed in the period in which a triggering event occurs that would result in either a revision to the cost or a change in the estimated settlement date. Examples of events that would trigger a change in the cost include a new reclamation law or amendment to an existing mineral lease. Examples of events that would cause a change in the estimated settlement date include the acquisition of additional reserves or early or delayed closure of a site. Any affect to earnings from cost revisions is included in cost of revenue.

A reconciliation of the carrying amount of our accrued reclamation liabilities is as follows:


Balance at April 1, 2020	$	108,701	$	119,593
Liabilities incurred		0		0
Accretion expense		5,317		5,834
Balance at September 30, 2020	$	114,018
Balance at September 30, 2021			$	125,427

~~12. SUBSEQUENT EVENTS~~

~~Land Under Development~~

In 2018, the Company formed the Rocky Mountain Rail Park Metropolitan District (“District”) for the purpose of financing public improvements related to the development of approximately 620 acres including open space and other right-of-way areas and providing ongoing operations and maintenance services related to the public improvements. Public improvements are generally, any part or all of the public improvements authorized to be planned, designed, acquired, constructed, installed, relocated, redeveloped, operated, maintained and/or financed, including necessary and appropriate landscaping, appurtenances and real property to effect such improvements, as generally described in the Colorado Special District Act (Title 32, Article 1, Colorado Revised Statutes) and as may be necessary to serve the future taxpayers and inhabitants of the District, as determined by the District Board, including public improvements within and without the District’s boundaries.

In April 2021, the District closed on its Limited Tax General Obligation and Water Revenue Bonds, Series 2021A and 2021B (“Tax -Exempt Bonds”) raising total proceeds of approximately $65.2 million, $51.2 million of which will be directly used to fund the public improvements. The Tax -Exempt Bonds are an obligation of the District and not of the Company and will be repaid through ownership taxes and other enterprise revenues collected by the District from property owners residing in the District.

~~Water Rights~~

In September 2021, the Company sold its water rights attributable to the Land under development to the District for a sales price of approximately $5.9 million. The proceeds were received on September 30, 2021, resulting in the recording of a gain on sales of assets of approximately $5.8 million, which was recognized in the consolidated statement of operation for the quarter ended September 30, 2021.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion includes forward-looking statements for purposes of U.S. federal securities laws. See “Cautionary Note Regarding Forward-Looking Statements”.

Overview

Rocky Mountain Industrials, Inc. (“we”, “us”, the “Company” or “RMI”) is dedicated to operating industrial assets in the United States which include minerals, materials, and services. Our vision is to become a key provider of industrial materials and services in the Rocky Mountain region. We have a strategy to own, operate, develop, acquire and vertically integrate complementary industrial businesses.

We were incorporated in the State of Nevada on August 6, 2012, under the name “Online Yearbook” with the principal business objective of developing and marketing online yearbooks for schools, companies, and government agencies.

On November 17, 2014, Rocky Mountain Resource Holdings, Inc. (“RMRH”) became our majority shareholder by acquiring 5,200,000 shares of our common stock (the “Shares”), or 69.06% of the issued and outstanding shares of our common stock, pursuant to stock purchase agreements with Messrs. El Maraana and Salah Blal, our former officers and directors. The Shares were acquired for an aggregate purchase price of $357,670.

On December 8, 2014, our name was changed from Rocky Mountain Resource Holdings, Inc. to “RMR Industrials, Inc.” On January 1, 2020, we changed our name from RMR Industrials, Inc., to “Rocky Mountain Industrials, Inc.”

On February 27, 2015 (the “Closing Date”), we entered into and consummated a merger transaction pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, OLYB Acquisition Corporation, a Nevada corporation and wholly owned subsidiary of the Company (“Merger Sub”), and RMR IP, Inc., a Nevada corporation (“RMR IP”). In accordance with the terms of Merger Agreement, on the Closing Date, Merger Sub merged with and into RMR IP (the “Merger”), with RMR IP surviving the Merger as our wholly owned subsidiary. Chad Brownstein and Gregory M. Dangler are directors of the Company and co-owners of RMRH, which was the majority shareholder of the Company prior to the Merger. Additionally, Messrs. Brownstein and Dangler were indirect controlling shareholders and directors of RMR IP prior to the Merger. As such, the Merger was among entities under the common control of Messrs. Brownstein and Dangler.

On July 28, 2016, we formed RMR Aggregates, Inc., a Colorado corporation (“RMR Aggregates”), as a wholly owned subsidiary of the Compnay. RMR Aggregates was formed to hold assets primarily relating to the mining and processing of industrial minerals for the manufacturing, construction, and agriculture sectors. These minerals include limestone, aggregates, marble, silica, barite, and sand.

On October 12, 2016, pursuant to an Asset Purchase Agreement with CalX Minerals, LLC, a Colorado limited liability company (“CalX”), we completed the purchase of substantially all of the assets associated with the Mid-Continent Limestone Quarry on 41 BLM unpatented placer mining claims in Garfield County, Colorado. CalX assets include the mining claims, improvements, access rights, water rights, equipment, inventory, contracts, permits, certain intellectual property rights, and other tangible and intangible assets associated with the limestone mining operation.

During January 2018, the Company formed Rail Land Company, LLC (“Rail Land Company”) as a wholly owned subsidiary of the Company to acquire and develop a rail terminal and services facility (“Rail Park”). Rail Land Company purchased 620 acres of real estate located in Bennett, Colorado. The Company’s development of the Rail Park is intended to expand the Company’s customer base for our products by utilizing rail freight capabilities to reach customers in the greater Denver area and by expanding our business to include rail transportation solutions and services.

On April 26, 2019, RMR Logistics entered into an asset Purchase agreement with H2K, LLC, a Colorado Limited Liability Company (“the Seller”) pursuant to which RMR Logistics acquired the sellers trucking assets. In April 2020, the Company

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began the shutdown of substantially all the operations of RMR Logistics with the closure of its Wellington, Colorado location and the disposal of its operational assets through auction.

Results of Operations

Comparison of the Three and Six Months Ended September 30, ~~2020~~2021 and September 30, ~~2019~~2020

Revenues

Our revenues for the three-month and six-month period ended September 30, ~~2020~~2021 were ~~$174,300~~$381,882 and ~~$443,261,~~$781,794, respectively. This compares to revenue for the same period ended September 30, ~~2019~~2020 of ~~$282,613~~$174,300 and ~~$516,564.~~$443,261.

Cost of Goods Sold

Our cost of goods sold for the three-month and six-month periods ended September 30, ~~2020~~2021 were ~~$152,990~~$370,960 and ~~$343,668,~~$655,853, respectively. This compares to cost of goods sold for the same periods ended September 30, ~~2019~~2020 of ~~$216,121~~$152,990 and ~~$543,117.~~$343,668.

Operating Expenses

Our operating expenses for the three-month and six-month periods ended September 30, ~~2020~~2021 were ~~$3,051,235~~$3,113,199 and ~~$5,965,605.~~$5,923,648. This compares to operating expenses for the same periods ended September 30, ~~2019~~2020 of ~~$2,858,228~~$3,051,235 and ~~$5,703,835.~~$5,965,605. Operating expenses consisted of overhead costs related to mining operations, consulting services from related parties, public company costs, salaries and wages, and depreciation and amortization. ~~The increase was due primarily to costs incurred by the Company in relation to the Company’s rail park development.~~

Interest Expense (Income), net

Our interest expense, net for the three-month and six-month periods ended September 30, ~~2020~~2021 were $156,408 and $319,517, compared to $215,151 and $333,801 ~~compared to $76,088 and $141,593~~ of interest expense for the same period ended September 30, ~~2019.~~2020.

Net ~~Loss Attributable to Rocky Mountain Industrials, Inc.~~Income (Loss)

Our net ~~loss~~income for the three-month and six-month periods ended September 30, ~~2020~~2021 was ~~$4,143,326~~$3,003,891 and ~~$7,509,308.~~$583,852. This compares to a net loss for the same periods ended September 30, ~~2019~~2020 of ~~$2,964,887~~$4,143,326 and ~~$5,753,910.~~$7,509,308.

Liquidity and Capital Resources

As of September 30, ~~2020,~~2021, we had current assets of ~~$1,765,234,~~$9,879,819, total current liabilities of ~~$9,167,955~~$9,345,619 and working capital ~~deficiency~~ of ~~$7,402,721.~~$534,200. We have incurred an accumulated loss of ~~$56,477,575~~$57,259,067 since inception.

~~We will be seeking additional capital to execute our business plan~~In past years, the Company funded operations by using cash proceeds received through the issuance of common and ~~reach positive cash flow~~preferred stock and proceeds from ~~operations. Our base monthly expenses are approximately $200,000 per month. As evidenced by approximately $1.6 million of our current liabilities being owed to related parties, we~~debt financing. However, several significant transactions have ~~relied historically on related parties to sustain~~occurred over the ~~Company’s operations. In order to successfully execute our business plan,~~last 12 months that have positively impacted the net ~~proceeds~~financial position of the Company and strengthened its financial position and its ability to meet future obligation over the next 12 months without a ~~$10-20 million offering will be~~need to raise additional funds as it has traditionally been required to ~~finance our planned acquisition and for general working capital purposes.~~do. These include:

We do not generate adequate cash flows to support our existing operations. Moreover, the historical and existing capital structure is not adequate to fund our planned growth. Our current cash requirements are significant due to our business plan which contemplates future acquisitions. We anticipate generating losses at least through the 2021 fiscal year. We anticipate that we will be able to raise sufficient amounts of working capital in the near term through debt or equity offerings as may be required to meet short-term obligations.

Rail Park FDP and Final Plat were unanimously approved by the Adams County Board of County Commissioners on September 1, 2020, paving the way for lot sales and construction.

On January 14, 2021, the Company sold an 83-acre lot to a Fortune 500 company for a gross sales price of $9.1M. This purchase was the first of twelve available lots in the Rail Park. Lot sales will be a primary source of cash inflows for the Company with significant interest from many potential light and heavy industrial tenants.

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Other than as stated above, we currently do not have any arrangements for additional financing, and we may not be able to obtain financing when required. Our future is dependent upon our ability to obtain financing, a successful marketing and promotion program, and, further in the future, achieving a profitable level of operations. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. We will require additional funds to maintain our reporting status with the SEC and remain in good standing with the state of Nevada. There are no assurances that we will be able to raise the required working capital on favorable terms, in a timely manner or at all. Any failure to secure additional financing may force us to modify our business plan. In addition, we cannot be assured of profitability in the future.

~~Going Concern~~

We have incurred net losses since our inception on October 15, 2014 through September 30, 2020 totaling $56,477,575 and have completed the preliminary stages of our business plan. We anticipate incurring additional losses before realizing any revenues and will depend on additional financing in order to meet our continuing obligations and ultimately to attain profitability. Our ability to obtain additional financing, whether through the issuance of additional equity or through the assumption of debt, is uncertain. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business.

The RMRP Metro District bond offering closed on April 15, 2021, raising total proceeds of approximately $65.2M. These bond proceeds will fund the public infrastructure costs of the Rail Park. Total Rail Park project cost have been budgeted at between $60M and $75M of which approximately 75% is considered public infrastructure and therefore not an obligation of the Company. The Company is responsible for the remaining approximately 25%.

Construction on the south parcels of the Rail Park (approximately 150 acres) began in April 2021. The Company has in place a construction loan facility of $12M to fund it portion of construction costs (i.e., those not funded with Metro District bond proceeds).

To date the Company has received approximately $2M as reimbursement of “pre-construction” costs that were incurred prior to the closing of the Bond Offering in April.

In September 2021, the Company sold its water rights underlying the Rail Park, to the Metro District for approximately $5.9M.

Recently Issued Accounting Pronouncements

We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position, or cash flows.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Required

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to the material weakness described below.

In light of the material weakness described below, we performed additional analysis and other post-closing procedures to ensure that our condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the condensed consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

Material Weakness and Related Remediation Initiatives

Our Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, ~~2020,~~2021, there was a material weakness in our internal control over financial reporting in that, due to budget constraints, the Company’s accounting department does not have sufficient accounting personnel (either in-house or external) necessary to ensure that complete and effective financial reporting controls are designed and implemented. Accordingly, we did not perform timely and sufficient internal or external review of our current fiscal year financial reporting, which resulted in untimely financial statement filings.

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Remediation of Internal Control Deficiencies and Expenditures

We are developing a plan to address this material weakness, which includes hiring qualified accounting personnel and establishing a formal audit committee. We are uncertain at this time of the costs necessary to remediate the material weakness. Once implemented, remedial controls will have to be in place for at least several quarters before management is able to conclude that the material weakness has been remediated. We intend to continue to evaluate and strengthen our internal control over financial reporting systems. These efforts require significant time and resources. If we are unable to establish adequate internal control over financial reporting systems, we may encounter difficulties in the audit or review of our financial statements by our independent registered public accounting firm, which in turn may have a material adverse effect on our ability to prepare financial statements in accordance with GAAP and to comply with our SEC reporting obligations.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act, during the fiscal quarter ended September 30, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Not required.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the six months ended September 30, ~~2020, accredited investors purchased 14.95 shares~~2021, there were no sales of Series A-2 Preferred Stock for which the Company received gross proceeds of $1,500,000. During the same period, accredited investors exercised warrants to purchase 2,500 Class B Common Stock shares for which the Company received $31,250 in gross proceeds.unregistered equity securities.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Information regarding mine safety violations is included in Exhibit 95 to this quarterly report.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number		Exhibit Description

31.1 *		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 *		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 *		Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 *		Certification of the Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95*		Mine Safety Disclosures
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

*	Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ROCKY MOUNTAIN INDUSTRIALS, INC.


Date: December 15, 2021	By:	/s/ Brian Fallin
	Brian Fallin
	Chief Executive Officer
	(Principal Executive Officer)


Date: December 15, 2021	By:	/s/ Brian H. Aratani
	Brian H. Aratani
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

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		Three months ended September 30, 2020								Six months ended September 30, 2020
Description		Aggregates		Rail Park		Other/Corporate		Total		Aggregates		Rail Park		Other/Corporate		Total
Revenue	$	174,300	$	—	$	—	$	174,300	$	443,261	$	—	$	—	$	443,261
Gross profit		21,310		—		—		21,310		99,593		—		—		99,593
Selling, general and administrative		193,558		—		2,857,677		3,051,235		632,179		—		5,333,426		5,965,605
Property, plant and equipment, net		2,750,867		—		61,612		2,812,479		2,750,867		—		61,612		2,812,479
Land under development		—		7,497,146		12,906		7,510,052		—		7,497,146		12,906		7,510,052


		Three months ended September 30, 2019										Six months ended September 30, 2019
Description		Aggregates		Logistics		Rail Park		Other		Total		Aggregates		Logistics		Rail Park		Other		Total
Revenues from external customers	$	267,575	$	488,111	$	—	$	(100,350)	$	655,336	$	501,525	$	813,572	$	—	$	(182,037)	$	1,133,060
Intersegment revenues		(100,348)		100,348		—		—		—		(182,037)		182,037		—		—		—
Interest expense		1,113		31,825		—		74,139		107,077		2,367		50,821		—		137,468		190,656
Depreciation, depletion and amortization		70,752		100,731		—		976		172,459		143,931		158,909		—		1,278		304,118
Segment loss		461,069		282,408		14,831		2,352,591		3,110,899		944,390		334,357		21,604		4,756,925		6,057,276
Segment assets		4,158		442,701		213,776		403,093		1,063,728		3,599,439		3,175,151		6,036,901		1,564,995		14,376,486
Expenditure for segment assets		—		433,099		—		—		433,099		—		2,704,124		—		—		2,704,124