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 ~~June~~September 30, 2023

☐ 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.)

6200 South Syracuse Way, Suite 450

Greenwood Village, CO 80111

(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 ~~August~~November 8, 2023, the registrant had 35,785,858 shares of Class A Common Stock, 4,973,832 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, 2023 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,” “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).

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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”) Regulation S-K 1300, Disclosure by Registrants Engaged or to be Engaged in Mining Operations (“S-K 1300”), because we do not have mineral reserves as defined under S-K 1300. Mineral reserves are defined in S-K 1300 as that part of a measured mineral resource which can be economically and legally extracted or produced at the time of the mineral reserve determination. The establishment of a mineral resource under S-K 1300 is, among other things, a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Since we have no mineral reserves as defined in S-K 1300, 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 S-K 1300 until such time as we demonstrate mineral reserves in accordance with the criteria in S-K 1300.

Since we have no mineral 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 mineral reserves and have exited the exploration stage typically capitalize these costs, and subsequently amortize them on a units-of-production basis as mineral 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 mineral 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 mineral reserves and therefore have not exited the exploration stage as defined in S-K 1300, 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 S-K 1300. Furthermore, since we do not have mineral 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 ~~June~~September 30, 2023 and March 31, 2023	5

	Condensed Consolidated Statements of Operations for the three and six months ended ~~June~~September 30, ~~2023and~~2023 and 2022	6

	Statement of Changes in Stockholder Equity for the three and six months ended ~~June~~September 30, ~~2023and~~2023 and 2022	7

	Condensed Consolidated Statements of Cash Flows for ~~thethree~~the six months ended ~~June~~September 30, 2023 and 2022	9

	Notes to Condensed Consolidated Financial Statements	10

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19

ITEM 4.	CONTROLS AND PROCEDURES	19

PART II – OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	20

ITEM 1A.	RISK FACTORS	20

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	20

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	20

ITEM 4.	MINE SAFETY DISCLOSURES	20

ITEM 5.	OTHER INFORMATION	20

ITEM 6.	EXHIBITS	21

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ROCKY MOUNTAIN INDUSTRIALS, INC.

Condensed Consolidated Balance Sheets (Unaudited)


	June 30,		March 31,		September 30,		March 31,
	2023		2023		2023		2023
ASSETS
Current assets
Cash	$	6,814,589	$	3,528,858	$	5,425,031	$	3,528,858
Accounts receivable		52,479		53,604		196,465		53,604
Other receivables		1,432,920		2,647,268		1,585,311		2,647,268
Inventory		97,874		102,243		83,650		102,243
Prepaid expenses		843,320		1,251,644		2,453,216		1,251,644
Total current assets		9,241,182		7,583,617		9,743,673		7,583,617

Property, plant, and equipment, net		2,122,818		2,233,971		2,080,121		2,233,971
Land under development		22,361,233		14,939,567		22,922,471		14,939,567
Right of use asset		398,472		417,734		378,896		417,734
Asset retirement obligation, net		65,049		66,264		63,834		66,264
Other intangibles, net		41,000		41,000		41,000		41,000
Restricted cash		185,530		185,530		185,530		185,530
Deposits and other assets		35,090		35,090		35,090		35,090
Total assets	$	34,450,374	$	25,502,773	$	35,450,615	$	25,502,773

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	10,363,230	$	7,576,480	$	7,117,089	$	7,576,480
Accrued liabilities		153,885		147,621		163,075		147,621
Accrued liabilities, related party		1,997,500		1,877,500		2,117,500		1,877,500
Dividends payable		1,878,037		1,742,869		2,014,691		1,742,869
Debt due within one year		32,997		40,969		47,000		40,969
Lease liability, current		80,260		78,960		81,586		78,960
Total current liabilities		14,505,909		11,464,399		11,540,941		11,464,399

Debt due after one year		21,007,136		13,512,824		17,208,682		13,512,824
Lease liability, long-term		383,678		406,784		360,229		406,784
Accrued reclamation liability		148,237		144,707		151,767		144,707
Total liabilities		36,044,960		25,528,714		29,261,619		25,528,714

Commitments and Contingencies

Stockholders’ Equity (Deficit)
Preferred Stock Series A-1, $0.001 par value, 50,000,000 shares authorized: 48.27 shares issued and outstanding on June 30, 2023 and March 31, 2023		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 June 30, 2023 and March 31, 2023		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 June 30, 2023 and March 31, 2023		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 June 30, 2023 and March 31, 2023		35,786		35,786
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 4,973,832 shares issued and outstanding on March 31, 2023 and March 31, 2022		4,975		4,975
Preferred Stock Series A-1, $0.001 par value, 50,000,000 shares authorized: 48.27 shares issued and outstanding on September 30, 2023 and March 31, 2023						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, 2023 and March 31, 2023						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, 2023 and March 31, 2023						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, 2023 and March 31, 2023						35,786		35,786
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 4,973,832 shares issued and outstanding on September 30, 2023 and March 31, 2023						4,975		4,975
Additional paid-in capital		60,876,531		60,783,824		61,840,159		60,783,824
Accumulated deficit		(74,364,018)		(72,702,666)		(67,544,064)		(72,702,666)
Total stockholders’ equity (deficit)		(1,594,586)		(25,941)		6,188,996		(25,941)
Total liabilities and stockholders’ equity (deficit)	$	34,450,374	$	25,502,773	$	35,450,615	$	25,502,773

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)

For the three months ended

June 30,

2023

2022

Revenue

$
134,593

$
183,150

Cost of goods sold

139,249

274,711

Gross profit (loss)

(4,656)

(91,561)

Selling, general and administrative (includes depreciation, depletion and amortization of $112,367 in 2023 and $54,719 in 2022)

1,198,654

2,394,330

Loss from operations

(1,203,310)

(2,485,891)

Gain (loss) on sale of assets

—

(5,909)

Other Income (expense)

30,000

—

Interest income (expense), net

(352,874)

(206,975)

Loss before income tax provision

(1,526,184)

(2,698,775)

Income tax expense

—

—

Net Loss

$
(1,526,184)

$
(2,698,775)

Earnings (loss) per shares - basic and diluted

$
(0.25)

$
(0.43)

Weighted average shares outstanding - basic and diluted

6,763,125

6,537,153


	For the three months ended				For the six months ended
	September 30,				September 30,
	2023		2022		2023		2022

Revenue	$	201,779	$	288,431	$	336,372	$	471,581
Cost of goods sold		177,992		296,434		317,241		571,145
Gross profit (loss)		23,787		(8,003)		19,131		(99,564)
Selling, general and administrative (includes depreciation, depletion and amortization of the three months ended of $43,912 in 2023 and $54,719 in 2022 and for the six months ended $112,870 in 2022 and $156,279 in 2023)		1,042,616		1,699,766		2,241,270		4,094,096
Loss from operations		(1,018,829)		(1,707,769)		(2,222,139)		(4,193,660)
Gain (loss) on sale of assets		8,191,610		—		8,191,610		(5,909)
Other Income (expense)		—		—		30,000		—
Interest income (expense), net		(216,173)		(210,477)		(569,047)		(417,452)
Loss before income tax provision		6,956,608		(1,918,246)		5,430,424		(4,617,021)
Income tax expense		—		—		—		—
Net Income (Loss)	$	6,956,608	$	(1,918,246)	$	5,430,424	$	(4,617,021)

Earnings (loss) per shares - basic	$	0.92	$	(0.31)	$	0.70	$	(0.73)

Earnings (loss) per shares - diluted	$	0.91	$	(0.31)	$	0.70	$	(0.73)

Weighted average shares outstanding - basic		7,381,157		6,656,125		7,387,157		6,655,332

Weighted average shares outstanding - diluted		7,620,771		6,656,125		7,387,157		6,655,332

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

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, 2022

35,785,858

$
35,786

4,866,832

$
4,868

48.27

$
4,827,000

19.45

$
1,950,000

50.75

$
5,075,140

$
58,972,469

$
(63,810,756)

$
7,054,507
Issuance of restricted Class B Common stock for compensation

—

—

5,000

5

—

—

—

—

—

—

—

(5)

—
Forfeiture of Class B Common stock

—

—

(5,000)

(5)

—

—

—

—

—

—

—

5

—
Quarterly dividends on Series A-1 and A-2 Preferred shares

—

—

—

—

—

—

—

—

—

—

—

(135,170)

(135,170)
Stock-based compensation

—

—

—

—

—

—

—

—

—

—

656,876

—

656,876
Net loss

—

—

—

—

—

—

—

—

—

—

—

(2,698,775)

(2,698,775)
Balance, June 30, 2022

35,785,858

$
35,786

4,866,832

$
4,868

48.27

$
4,827,000

19.45

$
1,950,000

50.75

$
5,075,140

$
59,629,345

$
(66,644,701)

$
4,877,438


							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, 2022	35,785,858	$	35,786	4,866,832	$	4,868	48.27	$	4,827,000	19.45	$	1,950,000	50.75	$	5,075,140	$	58,972,469	$	(63,810,756)	$	7,054,507
Issuance of restricted Class B Common stock for compensation	—		—	5,000		5	—		—	—		—	—		—		—		(5)		—
Forfeiture of Class B Common stock	—		—	(5,000)		(5)	—		—	—		—	—		—		—		5		—
Quarterly dividends on Series A-1 and A-2 Preferred shares	—		—	—		—	—		—	—		—	—		—		—		(135,170)		(135,170)
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		656,876		—		656,876
Net loss	—		—	—		—	—		—	—		—	—		—		—		(2,698,775)		(2,698,775)
Balance, June 30, 2022	35,785,858		35,786	4,866,832		4,868	48.27		4,827,000	19.45		1,950,000	50.75		5,075,140		59,629,345		(66,644,701)		4,877,438
Issuance of Class B Common Shares upon exercise of warrants	—		—	—		—	—		—	—		—	—		—		—		—		—
Issuance of Class B Common shares for services	—		—	—		—	—		—	—		—	—		—		—		—		—
Forfeiture of Class B Common stock	—		—	—		—	—		—	—		—	—		—		—		—		—
Quarterly dividends on A-1 and A-2 Preferred shares	—		—	—		—	—		—	—		—	—		—		—		(136,654)		(136,654)
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		655,105		—		655,105
Net loss	—		—	—		—	—		—	—		—	—		—		—		(1,918,246)		(1,918,246)
Balance, September 30, 2022	35,785,858	$	35,786	4,866,832	$	4,868	48.27	$	4,827,000	19.45	$	1,950,000	50.75	$	5,075,140	$	60,284,450	$	(68,699,601)	$	3,477,643

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, 2023

35,785,858

$
35,786

4,973,832

$
4,975

48.27

$
4,827,000

19.45

$
1,950,000

50.75

$
5,075,140

$
60,783,824

$
(72,702,666)

$
(25,941)
Issuance of restricted Class B Common stock for compensation

—

—

—

—

—

—

—

—

—

—

—

—

—
Forfeiture of Class B Common stock

—

—

—

—

—

—

—

—

—

—

—

—

—
Quarterly dividends on Series A-1 and A-2 Preferred shares

—

—

—

—

—

—

—

—

—

—

—

(135,168)

(135,168)
Stock-based compensation

—

—

—

—

—

—

—

—

—

—

92,707

—

92,707
Net loss

—

—

—

—

—

—

—

—

—

—

—

(1,526,184)

(1,526,184)
Balance, June 30, 2023

35,785,858

$
35,786

4,973,832

$
4,975

48.27

$
4,827,000

19.45

$
1,950,000

50.75

$
5,075,140

$
60,876,531

$
(74,364,018)

$
(1,594,586)


							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, 2023	35,785,858	$	35,786	4,973,832	$	4,975	48.27	$	4,827,000	19.45	$	1,950,000	50.75	$	5,075,140	$	60,783,824	$	(72,702,666)	$	(25,941)
Issuance of restricted Class B Common stock for compensation	—		—	—		—	—		—	—		—	—		—		—		—		—
Forfeiture of Class B Common stock	—		—	—		—	—		—	—		—	—		—		—		—		—
Quarterly dividends on Series A-1 and A-2 Preferred shares	—		—	—		—	—		—	—		—	—		—		—		(135,168)		(135,168)
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		92,707		—		92,707
Net loss	—		—	—		—	—		—	—		—	—		—		—		(1,526,184)		(1,526,184)
Balance, June 30, 2023	35,785,858		35,786	4,973,832		4,975	48.27		4,827,000	19.45		1,950,000	50.75		5,075,140		60,876,531		(74,364,018)		(1,594,586)
Issuance of restricted Class B Common stock for compensation	—		—	—		—	—		—	—		—	—		—		914,150		—		914,150
Forfeiture of Class B Common stock	—		—	—		—	—		—	—		—	—		—		—		—		—
Quarterly dividends on Series A-1 and A-2 Preferred shares	—		—	—		—	—		—	—		—	—		—		—		(136,654)		(136,654)
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		49,478		—		49,478
Net income	—		—	—		—	—		—	—		—	—		—		—		6,956,608		6,956,608
Balance, September 30, 2023	35,785,858	$	35,786	4,973,832	$	4,975	48.27	$	4,827,000	19.45	$	1,950,000	50.75	$	5,075,140	$	61,840,159	$	(67,544,064)	$	6,188,996

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)

Three months ended

June 30,


2023

2022

Cash flow from operating activities:





Net loss

$
(1,526,184)

$
(2,698,775)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation, depletion and amortization expense

112,367

54,719

Stock-based compensation

92,707

656,876

Gain/loss on sale of assets

—

5,909

Amortization of debt discount and deferred financing cost

95,819

3,271

Accretion expense

3,530

3,209

Changes in operating assets and liabilities:

Accounts receivable

1,125

53,766

Other receivables

1,214,348

1,233,710

Inventory

4,369

(5,875)

Prepaid expenses

408,324

(258,333)

Restricted cash

—

(16)

Accounts payable

2,786,750

1,988,802

Accrued liabilities

7,670

116,240

Accrued liabilities, related parties

120,000

120,000

Lease Liability

(2,544)

8,714

Other

1

(1)

Net cash provided by (used in) operating activities

3,318,282

1,282,216

Cash Flows from Investing Activities:

Investment in land under development

(13,522,974)

(3,799,919)

Reimbursement of land under development cost from Metro District

6,101,308

1,852,328

Purchase of property, plant and equipment

—

(2,262)

Net cash provided by (used in) investing activities

(7,421,666)

(1,949,853)

Cash Flows from Financing Activities:

Proceeds from note payable

7,405,703

5,215,023

Repayment of debt

(16,588)

(5,153,109)

Net cash provided by financing activities

7,389,115

61,914

Net increase (decrease) in cash

3,285,731

(605,723)

Cash at beginning of period

3,528,858

3,238,377

Cash at end of period

$
6,814,589

$
2,632,654

Restricted cash at beginning of period

$
185,530

$
185,325

Other

—

16

Restricted cash at end of period

$
185,530

$
185,341

Supplemental cash flow information:

Cash paid for interest

$
273,432

$
164,683

Cash paid for income taxes

$
—

$
—

Right of use asset / Lease liability

$
—

$
481,435


	Six months ended
	September 30,
	2023		2022
Cash flow from operating activities:
Net income (loss)	$	5,430,424	$	(4,617,021)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization expense		156,279		112,870
Stock-based compensation		142,185		1,311,981
Gain/loss on sale of assets		(8,191,610)		5,909
Amortization of debt discount and deferred financing cost		197,506		219,245
Accretion expense		7,060		6,418
Changes in operating assets and liabilities:
Accounts receivable		(142,861)		29,781
Other receivables		1,061,957		887,533
Inventory		18,593		(28,113)
Prepaid expenses		(1,201,572)		(385,438)
Restricted cash		—		(16)
Deposits and other assets		—		11,039
Accounts payable		(459,391)		3,240,608
Accrued liabilities		18,266		13,149
Accrued liabilities, related parties		240,000		210,000
Lease Liability		(5,091)		34,853
Other		1		—
Net cash provided by (used in) operating activities		(2,728,254)		1,052,798

Cash Flows from Investing Activities:
Proceeds from sale of assets		10,451,411		—
Investment in land under development		(20,388,368)		(9,346,161)
Reimbursement of land under development cost from Metro District		10,145,663		5,838,502
Purchase of property, plant and equipment		—		(2,262)
Net cash provided by (used in) investing activities		208,706		(3,509,921)

Cash Flows from Financing Activities:
Proceeds from note payable		13,877,011		8,116,448
Repayment of debt		(10,375,440)		(5,176,135)
Issuance of Class B common stock for services		914,150		—
Deferred financing cost		—		(626,186)
Net cash provided by financing activities		4,415,721		2,314,127

Net increase (decrease) in cash		1,896,173		(142,996)
Cash at beginning of period		3,528,858		3,238,377
Cash at end of period	$	5,425,031	$	3,095,381

Restricted cash at beginning of period	$	185,530	$	185,514
Other		—		16
Restricted cash at end of period	$	185,530	$	185,530

Supplemental cash flow information:
Cash paid for interest	$	399,741	$	281,418
Cash paid for income taxes	$	—	$	—
Right of use asset / Lease liability	$	—	$	481,434

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.

Through our wholly owned subsidiary, RMR Aggregates, Inc. (“RMR Aggregates”), we operate the Mid-Continent Quarry in Garfield County, Colorado, producing chemical-grade calcium carbonate that currently services local and regional customers in a variety of end markets, including but not limited to mining, manufacturing, construction, and agriculture.

Through our wholly owned subsidiary, Rail Land Company, LLC (“Rail Land Company”), we are actively developing Rocky Mountain Rail Park (the “Rail Park”), a dedicated rail-served industrial business park serving the greater Denver market. The Company’s development of the Rail Park is intended to expand the 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.

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, 2023, (“2023 Form 10-K”) and should be read in conjunction with such consolidated financial statements and related notes. The 2023 year end consolidated balance sheet data included in the Form 10-Q filing was derived from the audited consolidated financial statements in our 2023 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, 2023 audited consolidated financial statements included in our 2023 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

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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 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 ~~$21,391,468~~$17,831,910 and $14,000,947 as of ~~June~~September 30, 2023 and March 31, 2023, respectively.

Earnings (loss) per Common Share

Basic earnings (loss) per common share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding during the period, without consideration for the potentially dilutive effects of converting stock options or restricted stock purchase rights outstanding. Diluted earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average 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.~~method if the effect is not anti-dilutive. In periods in which the Company reports a net loss, diluted earnings per share is the same as basic earnings per share since dilutive common shares are not assumed to have been issued, as their effect is anti-dilutive. Participating securities (primarily convertible preferred stock) of 624,032 equivalent common shares have been included in basic and diluted weighted average shares outstanding, for the three and six months ended September 30, 2023.

3. INVENTORY

Inventory, is valued at the lower of cost (average) or ~~market.~~net realizable value.


	June 30,		March 31,		September 30,		March 31,
	2023		2023		2023		2023

Blasted Rock	$	97,874	$	102,243	$	83,650	$	102,243
Total	$	97,874	$	102,243	$	83,650	$	102,243

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4. PROPERTY, PLANT AND EQUIPMENT

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


	June 30,		March 31,		September 30,		March 31,
	2023		2023		2023		2023
Recoverable Limestone	$	1,477,469	$	1,477,469	$	1,477,469	$	1,477,469
Mill Equipment		1,220,657		1,220,657		1,220,657		1,220,657
Mining Equipment		333,029		333,029		333,030		333,029
Mobile Equipment		708,661		863,660		569,212		863,660
Other		78,974		78,974		78,972		78,974
Total		3,818,790		3,973,789		3,679,340		3,973,789
Less: Accumulated Depreciation		(1,695,972)		(1,739,818)		(1,599,219)		(1,739,818)
Property, plant and equipment, net	$	2,122,818	$	2,233,971	$	2,080,121	$	2,233,971

5. NOTES PAYABLE

In May 2022, Rail Land Company executed on a Promissory Note for a construction loan (“Construction Note”) of $21M and a Promissory Note for a revolving line of credit (“Line of Credit”) of $2M with a bank to provide for the developer portion of infrastructure costs of the Rail Park. A portion of the $21M Construction Note was used to repay the Secured Promissory Note. The Construction Note is secured by the underlying property of the Rail Park and RMI is the guarantor. The Line of Credit is secured by amounts owed to Rail Land Company from the District for submitted pay applications. The Construction Note and Line of Credit incur interest at prime rate plus 2.25% and each ~~have~~had maturity dates of May 20, 2024. The initial interest rate was 6.25%.

On July 28, 2023, Rail Land Company executed an amendment to its $21M Construction Note. The amendment cancelled the $2M Line of Credit and increased the Construction Note to $29.5M and includes a reborrowing amount of up to $8.5M. The Construction Note incurs interest at prime rate plus 2.25% and has an amended maturity date of February 17, 2025.

Net proceeds from the sale of Rail Park lots shall be used to reduce the then outstanding principal balance of the Construction Note at a rate of eighty five percent (85%) of net proceeds of the first lot sale and ~~seventy five~~ninety percent ~~(75%~~(90%) of net proceeds from subsequent lot sales. Distribution or dividends of Rail Land Company to any of its members or other legal beneficial owner may not be paid without the consent of the bank. Rail Land Company is to maintain a minimum cash balance with the bank of $1M, tested quarterly.


					Effective						Effective
	June 30, 2023		March 31, 2023		Interest Rate	Maturity Date	September 30, 2023		March 31, 2023		Interest Rate	Maturity Date
Equipment Loans	$	1,497	$	5,969	2.10% - 6.30%	August 25, 2021 - January 22, 2023	$	—	$	5,969	2.10% - 6.30%	August 25, 2021 - January 22, 2023
Construction Note		20,992,368		13,586,665	10.50%	May 20, 2024		17,444,972		13,586,665	10.75%	February 17, 2025
Promissory notes		231,665		243,782	7.18%	January 1, 2025		219,595		243,782	7.18%	January 1, 2025
Secured disaster loan (SBA)		165,938		164,531	3.75%	September 9, 2050		167,343		164,531	3.75%	September 9, 2050
		21,391,468		14,000,947				17,831,910		14,000,947
Unamortized debt issuance cost		(351,335)		(447,154)				(576,228)		(447,154)
		21,040,133		13,553,793				17,255,682		13,553,793
Less: current portion		(32,997)		(40,969)				(47,000)		(40,969)
Debt due after one year	$	21,007,136	$	13,512,824			$	17,208,682	$	13,512,824

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6. TRANSACTIONS WITH RELATED PARTIES

As of ~~June~~September 30, 2023, the Company has accrued ~~$1,997,500~~$2,117,500 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

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compensation of $35,000. The consulting agreements may be terminated by either party for breach or upon thirty days prior written notice.

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 shares as Series A-1 Convertible Preferred Stock, 19.45 shares as Series A-2 Convertible Preferred Stock and 50.75 shares 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 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,

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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

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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 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.

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.

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 ~~June~~September 30, 2023, there were 808,786 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. No stock option awards were granted during the ~~three~~six months ended ~~June~~September 30, 2023.

Stock Awards

During the ~~three~~six months ended ~~June30,~~September 30, 2023, the Company granted no restricted shares of Class B Common Stock. Restricted shares vest ratably over a four-year vesting period, subject to continued service and a performance condition. During the ~~three~~six months ended ~~June~~September 30, 2023, no restricted shares of common stock were forfeited.

9. SEGMENT REPORTING

For the three and six months ended ~~June~~September 30, 2023 and 2022, the Company has two reportable segments: Aggregates and Rail Park. The Aggregates segment produces chemical grade limestone for use in the aggregates market. The Rail Park segment consists of land under development to provide a rail terminal and services facility and currently has no operational activity. The Rail Park will require significant future capital investment before the segment starts generating recurring revenue. The Rail Park development commenced in the first half of calendar year 2021.

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Park segment consists of land under development to provide a rail terminal and services facility and currently has no operational activity. The Rail Park will require significant future capital investment before the segment starts generating recurring revenue. The Rail Park development commenced in the first half of calendar year 2021.

The Aggregates segment ~~has a mining~~had one construction company, ~~customer~~Customer A that accounted for ~~approximately 58%~~89% of ~~Aggregates~~ segment revenue for the three months ended ~~June~~September 30, 2023 and had two construction companies, Customer A that accounted for approximately 55% of segment revenue and Customer B that accounted for 24% of segment revenue for the six months ended September 30, 2023.

As of ~~June~~September 30, 2023, the ~~mining~~construction company, ~~and a construction company~~Customer A, accounted for approximately ~~36% and 15%~~92% of Aggregates segment accounts receivable balance.

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’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 June 30, 2023								Three months ended September 30, 2023								Three months ended September 30, 2022
		Aggregates		Rail Park		Other/Corporate		Total		Aggregates		Rail Park		Other/ Corporate		Total		Aggregates		Rail Park		Other/ Corporate		Total
Revenue	$	134,593	$	—	$	—	$	134,593	$	201,779	$	—	$	—	$	201,779	$	288,431	$	—	$	—	$	288,431
Gross profit (loss)		(4,656)		—		—		(4,656)		23,787		—		—		23,787		(8,003)		—		—		(8,003)
Selling, general and administrative		216,077		—		961,657		1,177,734		147,094		—		895,522		1,042,616		135,049		—		1,564,717		1,699,766
Property, plant and equipment, net		2,122,818		—		—		2,122,818		2,080,121		—		—		2,080,121		2,324,540		—		12,177		2,336,717
Land under development		—		22,361,233		—		22,361,233		—		22,922,471		—		22,922,471		—		10,481,293		—		10,481,293


	Three months ended June 30, 2022								Six months ended September 30, 2023								Six months ended September 30, 2022
	Aggregates		Rail Park		Other/Corporate		Total		Aggregates		Rail Park		Other/ Corporate		Total		Aggregates		Rail Park		Other/ Corporate		Total
Revenue	183,150	$	—	$	—	$	183,150	$	336,372	$	—	$	—	$	336,372	$	471,581	$	—	$	—	$	471,581
Gross profit (loss)	(91,561)		—		—		(91,561)		19,131		—		—		19,131		(99,564)		—		—		(99,564)
Selling, general and administrative	154,779		—		2,239,551		2,394,330		363,171		—		1,878,099		2,241,270		289,828		—		3,804,268		4,094,096
Property, plant and equipment, net	2,377,509		—		13,152		2,390,661		2,080,121		—		—		2,080,121		2,324,540		—		12,177		2,336,717
Land under development	—		8,921,225		—		8,921,225		—		22,922,471		—		22,922,471		—		10,481,293		—		10,481,293

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 outside of 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~~- 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~~

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

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Gain on Sale of Assets

In August 2023, the Rail Park sold approximately 60 acres of land under development for a total sales price of $13.1 million and recognized a net gain ~~on sales~~ of ~~assets of approximately $4.8 million, which was recognized in the consolidated statement of operation for the quarter ended September 30, 2021.~~$8.2 million.

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 ~~June~~September 30, 2023, 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.

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, 2023	$	144,707	$	144,707
Liabilities incurred		—		—
Accretion expense		3,530		7,060
Balance at June 30, 2023	$	148,237

Balance at September 30, 2023			$	151,767

~~11. SUBSEQUENT EVENTS~~

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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

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

In November 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 then issued and outstanding shares, 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.

In December 2014, we changed our name to “RMR Industrials, Inc.” and on January 1, 2020, the Company changed its name from RMR Industrials, Inc. to Rocky Mountain Industrials, Inc.

In July 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.

In October 2016, pursuant to an Asset Purchase Agreement with CalX Minerals, LLC, a Colorado limited liability company (“CalX”), RMR Aggregates completed the purchase of substantially all of the assets associated with the Mid-Continent 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.

In 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 in February, 2018.

In July 2018 we exercised our option to acquire an additional approximately 150 acres for a total of approximately 620 acres. The Company’s development of the Rail Park is intended to expand the 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.

Results of Operations

Comparison of the three and six months Ended ~~June~~September 30, 2023 and ~~June~~September 30, 2022

Revenues

Our revenues for the three-month and six-month periods ended ~~June~~September 30, 2023 was ~~$134,593.~~$201,779 and $336,372. This compares to revenue for the same period ended ~~June~~September 30, 2022 of ~~$183,150.~~$288,431 and $471,581. The decrease in revenues for the three-month and six-month period ended ~~June~~September 30, 2023, is the result of a decrease in demand from the Company’s primary customer.

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Cost of Goods Sold

Our cost of goods sold for the three-month ~~period~~and six-month periods ended ~~June~~September 30, 2023 was ~~$139,249.~~$177,992 and $317,241. This compares to cost of goods sold for the same period ended ~~June~~September 30, 2022 of ~~$274,711.~~$296,434 and $571,145. The decrease in cost of goods sold for the three-month and six-month period ended ~~June~~September 30, 2023 is generally the result of the decrease in revenues.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the three-month ~~period~~and six-month periods ended ~~June~~September 30, 2023 were ~~$1,198,654.~~$1,042,616 and $2,241,270. This compares to operating expenses for the same period ended ~~June~~September 30, 2022 of ~~$2,394,330.~~$1,699,766 and $4,094,096. Selling, general and administrative expenses consisted of overhead costs related to payroll and associated benefits, consulting services from related parties, public company costs, and depreciation and amortization. The decrease is primarily related to the Company managing selling, general and administrative costs as we continue to operate in a development stage.

Interest Expense, net

Our interest expense, net for the three-month ~~period~~and six-month periods ended ~~June 301,~~September 30, 2023 were ~~$352,874,~~$216,173 and $569,047, compared to ~~$206,975~~$210,477 and $417,452 of interest expense for the same periods ended ~~June~~September 30, 2022.

Net Income/(Loss)

Our net ~~loss~~income for the three-month and six-month period ended ~~June~~September 30, 2023 was ~~$1,526,184.~~$6,956,608 and $5,430,424. This compares to a net loss for the same ~~period~~periods ended ~~June~~September 30, 2022 of ~~$2,698,775.~~$1,918,246 and $4,617,021.

Liquidity and Capital Resources

As of ~~June~~September 30, 2023, we had current assets of ~~$9,241,182,~~$9,743,673, total current liabilities of ~~$14,505,909~~$11,540,941 and working capital deficiency of ~~$5,264,727.~~$1,797,268. We have incurred an accumulated loss of ~~$74,364,018~~$67,544,064 since inception.

In past years, the Company funded operations by using cash proceeds received through the issuance of common and preferred stock and proceeds from debt financing. However, several significant transactions have occurred that have positively impacted the net financial position of the Company and strengthened its financial position and its ability to meet future obligation over the next 12 months without a need to raise additional funds as it has traditionally been required to do. These include:

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.

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 its portion of construction costs (i.e., those not funded with Metro District bond proceeds).

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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.

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

In May 2022, the Company closed on a construction loan facility of $21M and a working capital facility of $2M to provide for its developer portion of the infrastructure costs of the Rail Park.

In July 2023, the Company amended its construction loan facility to increased it from $21M to $29.5M.

In August 2023, the Company sold approximately 60 acres of land under development for $13.1M.

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 ~~June~~September 30, 2023, 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.

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

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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.

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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 ~~June~~September 30, 2023, 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 ~~three~~six months ended ~~June~~September 30, 2023, there were no sales of 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

10.10*10.10		Second Amendment to Loan agreement dated August 1, 2023, between Rail Land Company LLC and Pacific Western Bank (incorporated by reference to our form 10Q filed on August 4,8, 2023)
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: ~~August~~November 8, 2023	By:	/s/ Brian Fallin
	Brian Fallin
	Chief Executive Officer
	(Principal Executive Officer)


Date: ~~August~~November 8, 2023	By:	/s/ Brian H. Aratani
	Brian H. Aratani
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)


	Three months ended
	June 30,
	2023		2022
Cash flow from operating activities:
Net loss	$	(1,526,184)	$	(2,698,775)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization expense		112,367		54,719
Stock-based compensation		92,707		656,876
Gain/loss on sale of assets		—		5,909
Amortization of debt discount and deferred financing cost		95,819		3,271
Accretion expense		3,530		3,209
Changes in operating assets and liabilities:
Accounts receivable		1,125		53,766
Other receivables		1,214,348		1,233,710
Inventory		4,369		(5,875)
Prepaid expenses		408,324		(258,333)
Restricted cash		—		(16)
Accounts payable		2,786,750		1,988,802
Accrued liabilities		7,670		116,240
Accrued liabilities, related parties		120,000		120,000
Lease Liability		(2,544)		8,714
Other		1		(1)
Net cash provided by (used in) operating activities		3,318,282		1,282,216

Cash Flows from Investing Activities:
Investment in land under development		(13,522,974)		(3,799,919)
Reimbursement of land under development cost from Metro District		6,101,308		1,852,328
Purchase of property, plant and equipment		—		(2,262)
Net cash provided by (used in) investing activities		(7,421,666)		(1,949,853)

Cash Flows from Financing Activities:
Proceeds from note payable		7,405,703		5,215,023
Repayment of debt		(16,588)		(5,153,109)
Net cash provided by financing activities		7,389,115		61,914

Net increase (decrease) in cash		3,285,731		(605,723)
Cash at beginning of period		3,528,858		3,238,377
Cash at end of period	$	6,814,589	$	2,632,654

Restricted cash at beginning of period	$	185,530	$	185,325
Other		—		16
Restricted cash at end of period	$	185,530	$	185,341

Supplemental cash flow information:
Cash paid for interest	$	273,432	$	164,683
Cash paid for income taxes	$	—	$	—
Right of use asset / Lease liability	$	—	$	481,435