Rocky Mountain Industrials (RMRI) 10-K 2021 FY Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2021

Or

☐ 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 other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4601 DTC Blvd., Suite 130 Denver, Colorado	80237
(Address of principal executive office)	(Zip Code)

(720) 614-5213

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

Class B Common Stock, par value $0.001 per share

(Title of each class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ◻  No  ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes  ◻  No   ⌧

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, smaller reporting company, or an 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ◻

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

The aggregate market value of the voting common stock held by non-affiliates of the registrant, based upon the closing sale price of the Common Stock on December 15, 2021 was N/A.

As of December 15, 2021, the Company had 35,785,858 Shares of Class A Common Stock and 4,822,332 Shares of Class B Common Stock, and 118.47 preferred shares outstanding.

Table of Contents

	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	15
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17
Item 6.	Selected Financial Data	17
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 8.	Financial Statements and Supplementary Data	23
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	23
Item 9A.	Controls and Procedures	23
Item 9B.	Other Information	25
	PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	26
Item 11.	Executive Compensation	29
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters	31
Item 13.	Certain Relationships and Related Transactions, and Director Independence	34
Item 14.	Principal Accounting Fees and Services.	35
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	36
SIGNATURES		38

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ROCKY MOUNTAIN INDUSTRIALS, INC.

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this Annual Report on Form 10-K 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 this Report on 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 Report, 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 known as 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 United States generally accepted accounting principles (U.S. 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”) 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.

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PART I

Item 1.      Business

Overview

RMI’s predecessor entity was incorporated in August 2012 as a Nevada corporation. We are an exploration stage company dedicated to operating industrial assets in the United States (U.S.) including minerals, materials and services. Our strategy is to become a key provider of industrial materials and services in the Rocky Mountain region. We utilize differentiated operational capabilities, which we believe will allow us to outperform conventional operators through diverse markets.

We have a strategy to own, operate, develop, acquire and vertically integrate complementary industrial businesses. The experienced management team of RMI has a multi-cycle track record of operating industrial resource businesses.

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. The Mid-Continent Quarry, which is located outside the city of Glenwood Springs, consists of 44 unpatented mining claims owned by the Bureau of Land Management and controlled by RMI. The operation currently serves Arch Coal, local construction firms, and various city and county government construction projects. The quarry is currently undergoing an expansion and modernization effort. For the years ended March 31, 2021 and 2020, we produced and sold 16,232 and 25,474 tons of high-calcium limestone, respectively, from the Mid-Continent Quarry. Please reference “Cautionary Note Regarding Exploration Stage Status and Use of Certain Mining Terms” for disclosure concerning the current stage of our mineral explorations.

We are also actively developing Rocky Mountain Rail Park (the “Rail Park”), a dedicated rail-served industrial business park serving the greater Denver market. In February 2018, we acquired approximately 470 acres of land in Bennett, Colorado which serves as the foundation for the Rail Park. In July 2018, we exercised our option to acquire an additional approximately 150 acres for a total of 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. We intend to be the permanent owner and operator of the Rail Park and once operational, the facility will seek to establish a new industrial hub for rail transportation and related services serving Adams County, Colorado and the greater Denver metropolitan area. Purchaser interest has been strong after the unanimous approval by the Adams County Board of County Commissioners of the Final Development Plan and Final Plat in September 2020. Additionally, the Rail Park sold an 83 acre lot in January 2021, which has further positively impacted the interest in the property’s remaining southern lots.

Rail freight capabilities will allow the Mid-Continent Quarry’s products to access the Denver market, where demand for calcium carbonate is currently strong and supply is relatively limited. The market opportunity is primarily centered on front range infrastructure demands, but also includes fertilizer, animal feed, and multiple other industrial applications. According to the USGS Natural Aggregates Statistics and information Colorado demand in 2020 for construction aggregate was approximately 51.8 million metric tons per year, comprised of 33.6 million metric tons of sand and gravel and 18.2 million metric tons of crushed stone. The area experiences supply shortages in peak seasons, creating a natural market for our products. We believe we are well-positioned to benefit from this market environment.

In addition to developing and expanding our existing assets, we expect to supplement our growth with strategic acquisitions of related business and the integration these businesses to achieve economies of scale and synergies. We target companies in various sectors directed towards industrial and/or infrastructure applications, including but not limited to construction materials, industrial minerals, industrial resources, logistics solutions, and transportation.

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Competitive Strengths

Our management team has extensive experience in investing in and operating natural resource assets. We believe our potential competitive strengths to be the following:

Application of Management Expertise. Our team has expertise in engineering, operations, finance and general management within the industrials resource sector.

Management Operating and Investing Experience.  Over the course of their careers, the members of our management team have developed a broad international network of contacts and corporate relationships which we believe will serve as a useful source of investment opportunities. The management team has applied its deep understanding of historical precedents in the natural resource markets to the development of our business and strategy. Some of our management team members have been working together for the last ten years, and over that time have assembled a team of industrial resources and investment professionals to pursue investments across the industry.

Revenues and Customers

For the year ended March 31, 2021, approximately 84% of our consolidated revenue was from one customer. At March 31, 2021, approximately 43% of our accounts receivable were due from the same customer.

Industry and Competition

Limestone

Limestone, or calcium carbonate is used in a variety of applications including coal mining, coal fired power plants, construction aggregates, glass bottle and steel manufacturing, and agriculture. Regional competitors include Pete Lien & Sons, Inc., and United States Lime & Minerals, Inc.

Construction Aggregates

Aggregates are key material components used in the production of cement, ready-mixed concrete and asphalt paving mixes for the residential, nonresidential and public infrastructure markets and are also widely used for various applications and products, such as road and building foundations, railroad ballast, erosion control, filtration, roofing granules and in solutions for snow and ice control. Generally extracted from the earth using surface or underground mining methods, aggregates are produced from natural deposits of various materials such as limestone, sand and gravel, granite and trap rock.

Markets are typically local due to high transport costs and are generally fragmented, with numerous participants operating in localized markets. According to the 2019 U.S. Geological Survey, the U.S. market for these products was estimated at approximately 2.47 billion tons in 2019, an increase of 5% vs. 2018. Aggregates consumption is more heavily weighted towards public infrastructure and maintenance repair. However, the mix of end uses can vary widely by geographic location, based on the nature of construction activity in each market. Typically, three to six competitors comprise the majority market share in each local market because of constraints around the availability of natural resources and transportation. Regional competitors for construction aggregates in Colorado include Martin Marietta Materials, Inc., Albert Frei & Sons, Inc., Aggregate Industries, Brannan Sand & Gravel Co., LLC, L.G. Everist, Inc., and BURNCO.

Environmental and Government Regulation

Our operations are and will be subject to extensive federal, state and local laws, regulations and ordinances in the United States and abroad relating to the protection of the environment and human health and to safety, including those pertaining to chemical manufacture and distribution, waste generation, storage and disposal, discharges to waterways, and air emissions and various other health and safety matters. Governmental authorities have the power to enforce compliance with their regulations, and violators may be subject to civil, criminal and administrative penalties, injunctions or both. We

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will devote significant financial resources to ensure compliance. We believe that we are in substantial compliance with all the applicable laws and regulations.

We anticipate that the regulation of our business operations under federal, state and local environmental laws in the United States and abroad will increase and become more stringent over time. We cannot estimate the impact of increased and more stringent regulation on our operations, future capital expenditure requirements or the cost of compliance.

United States Regulation. Statutory programs relating to protection of the environment and human health and to safety in the United States include, among others, the following.

CERCLA. The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, also known as “CERCLA” and “Superfund”, and comparable state laws generally impose joint and several liability for costs of investigation and remediation and for natural resource damages, without regard to fault or the legality of the original conduct, on certain classes of persons with respect to the release into the environment of specified substances, including under CERCLA those designated as “hazardous substances.” These “potentially responsible parties” include the present and certain former owners or operators of the site where the release occurred and those that disposed or arranged for the disposal of the hazardous substance at the site. These liabilities can arise in association with the properties where operations were conducted, as well as disposal facilities where wastes were sent. Many states have adopted comparable or more stringent state statutes. In the course of our operations, we have generated materials that fall within CERCLA’s definition of hazardous substances. We may also be the owner or operator of sites on which hazardous substances have been released and may have generated hazardous substances that have been transported to or otherwise released upon offsite facilities. We may be responsible under CERCLA for all or part of the costs to clean up facilities at which such substances have been released by previous owners or operators and offsite facilities to which our wastes were transported and for associated damages to natural resources.

Resource Conservation and Recovery Act. The federal Resource Conservation and Recovery Act, as amended (“RCRA”) and comparable state laws regulate the treatment, storage, disposal, remediation and transportation of wastes, specifically under RCRA those designated as “hazardous wastes.” The EPA and various state agencies have limited the disposal options for these wastes and impose numerous regulations upon the treatment, storage, disposal, remediation and transportation of them. Our operations generate wastes that are subject to RCRA and comparable state statutes. Furthermore, wastes generated by our operations that are currently exempt from treatment as hazardous wastes may be designated in the future as hazardous wastes under RCRA or other applicable statutes and, therefore, may be subject to more rigorous and costly treatment, storage and disposal requirements. Governmental agencies (and in the case of civil suits, private parties in certain circumstances) can bring actions for failure to comply with RCRA requirements, seeking administrative, civil, or criminal penalties and injunctive relief, to compel us to abate a solid or hazardous waste situation that presents an imminent or substantial endangerment to health or the environment.

Clean Water Act. The federal Clean Water Act imposes restrictions and strict controls regarding the discharge of pollutants, including dredged and fill materials into waters of the United States. Under the Clean Water Act, and comparable state laws, the government (and in the case of civil suits, private parties in certain circumstances) can bring actions for failure to comply with Clean Water Act requirements and enforce compliance through civil, criminal and administrative penalties for unauthorized discharges of hazardous substances and of other pollutants. In the event of an unauthorized discharge of pollutants, we may be liable for penalties and subject to injunctive relief.

Clean Air Act. The federal Clean Air Act (CAA), as amended and comparable state and local laws restrict the emission of air pollutants from many sources and also impose various monitoring and reporting requirements. These laws may require us to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain and strictly comply with air permit requirements or utilize specific equipment or technologies to control emissions. Governmental agencies (and in the case of civil suits, private parties in certain circumstances) can bring actions for failure to strictly comply with air pollution regulations or permits and generally enforce compliance through administrative, civil or criminal enforcement actions, resulting in fines, injunctive relief (which could include requiring us to forego construction, modification or operation of sources of air pollutants) and imprisonment. While we may be required to incur certain capital expenditures for air pollution control equipment or other air emissions-related issues, we do not believe that such requirements will have a material adverse effect on our operations.

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Greenhouse Gas Regulation. More stringent laws and regulations relating to climate change and greenhouse gases (GHGs) may be adopted in the future and could cause us to incur material expenses in complying with them. The EPA has begun to regulate GHGs as pollutants under the CAA. The EPA adopted rules to permit GHG emissions from stationary sources under the Prevention of Significant Deterioration and Title V permitting programs including the “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule,” requiring that the largest sources first obtain permits for GHG emissions. The United States Supreme Court, however, ruled in 2014 that the EPA did not have the authority to require permits for GHG emissions and also did not have the authority to adopt that rule. The EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source that is required to obtain a Prevention of Significant Deterioration or Title V permit. The Court did hold that if a source required a permit under the program because of other pollutants, the EPA had the authority to require that the source demonstrate that it would use the best available control technology to minimize GHG emissions that exceeded a minimal amount.

Because of the lack of any comprehensive legislation program addressing GHGs, the EPA is using its existing regulatory authority to promulgate regulations requiring reduction in GHG emissions from various categories of sources, starting with fossil fuel-fired power plants. Specifically, in June 2019, the EPA issued the final Affordable Clean Energy (“ACE”) rule, which, among other things, establishes emission guidelines for states to develop plans to address GHG emissions from existing coal-fired power plants. The ACE rule replaces the Clean Power Plan that the EPA had issued in 2015. There is a great deal of uncertainty as to how and when additional federal regulation of GHGs might take place. Some members of Congress have expressed the intention to promote legislation to curb the EPA’s authority to regulate GHGs. In addition to federal regulation, a number of states, individually and regionally, and localities also are considering implementing or have implemented GHG regulatory programs. These regional and state initiatives may result in so–called cap–and–trade programs, under which overall GHG emissions are limited and GHG emission “allowances” are then allocated and sold to and between persons subject to the program. These and possibly other regulatory requirements could result in our incurring material expenses to comply, for example by being required to purchase or to surrender allowances for GHGs resulting from other operations or otherwise being required to control or reduce emissions.

Health and Safety. Our operations are also governed by laws and regulations relating to workplace safety and worker health, principally regulations and requirements from the Occupational Safety and Health Administration (OSHA) and Mine Safety and Health Administration (“MSHA”). The OSHA hazard communication standard, the EPA’s community right-to-know regulations and similar state programs may require us to organize and/or disclose information about hazardous materials used or produced in our operations. Failure to comply with requirements from these laws and regulations can result in sanctions such as fines and penalties and claims for personal injury and property damage. These requirements may also result in increased operating and capital costs in the future. We believe that we are in substantial compliance with these requirements to extent applicable.

Licenses, Permits and Product Registrations. Certain licenses, permits and product registrations are required for our products and operations in the United States. The licenses, permits and product registrations are subject to revocation, modification and renewal by governmental authorities. In the United States in particular, producers and distributors of chemicals such as penta and creosote are subject to registration and notification requirements under federal law (including under the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”) and the Toxic Substances Control Act, and comparable state law) in order to sell those products in the United States. Compliance with these laws has had, and in the future will continue to have, a material effect on our business, financial condition and results of operations. Under FIFRA, the law’s registration system requires an ongoing submission to the EPA of substantial scientific research and testing data regarding the chemistry and toxicology of pesticide products by manufacturers.

Available Information

We maintain a website at http://rockymountainindustrials.com/ that contains additional information about our Company.

Employees

We currently have 12 full-time employees.

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Item 1A.   Risk Factors

Risks Relating to Our Business

We have incurred losses in prior periods and may incur losses in the future.

We may not achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise. There can be no assurance that future operations will be profitable. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.

Our future is dependent upon our ability to obtain financing. If we do not obtain such financing, we may have to cease our activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or generate positive cash flow in the future. We will require additional financing in order to proceed with our business plan and acquire existing businesses that manufacture and distribute chemicals and minerals. We will also require additional financing to sustain our business operations if we are not successful in earning revenues. We may not be able to obtain financing on commercially reasonable terms or terms that are acceptable to us when required. Our future is dependent upon our ability to obtain financing. If we do not obtain such financing, our business could fail and investors could lose their entire investment.

Our business may fail, and investors may lose all of their investment in our Company.

We are a company with a limited operating history and our future profitability is uncertain. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. If our business plan is not successful and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment in our Company.

We anticipate that we will incur increased operating expenses prior to realizing significant revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that, if we are unable to generate significant revenues from the sale of our products in the future, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will fail, and investors may lose all of their investment in our Company.

Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

Our limited operating history may not provide a meaningful basis on which to evaluate our business. We will continue to encounter risks and difficulties frequently experienced by companies at a similar stage of development, including our potential failure to:

● expand our product offerings and maintain the high quality of products offered;

● manage our expanding operations, including the integration of any future acquisitions;

● obtain sufficient working capital to support our expansion and to fill customers’ orders on time;

● maintain adequate control of our expenses;

● implement our product development, marketing, sales, and acquisition strategies and adapt and modify them as needed; and

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● anticipate and adapt to changing conditions in the markets in which we operate as well as the impact of any changes in government regulation, mergers and acquisitions involving our competitors, technological developments, and other significant competitive and market dynamics.

If we are not successful in addressing any or all of these risks, then our business may be materially and adversely affected.

If we are unable to identify, fund and execute new acquisitions, we will not be able to execute a key element of our business strategy.

Our strategy is to grow primarily by acquiring additional businesses and product lines. We cannot give any assurance that we will be able to identify, acquire or profitably manage additional businesses and product lines. Financing for acquisitions may not be available, or may be available only at a cost or on terms and conditions that are unacceptable to us. Further, acquisitions may involve a number of special risks or effects, including diversion of management’s attention, failure to retain key acquired personnel, unanticipated events or circumstances, legal liabilities, impairment of acquired intangible assets and other one-time or ongoing acquisition-related expenses. Some or all of these special risks or effects could have a material adverse effect on our financial and operating results. In addition, we cannot assure you that acquired businesses or product lines, if any, will achieve anticipated revenues and earnings, or that we will not assume unanticipated liabilities.

In addition, we may not be able to successfully or profitably integrate, operate, maintain and manage our newly acquired operations or their employees. We may not be able to maintain uniform standards, controls, procedures and policies, which may lead to operational inefficiencies.

We may be unable to sell rail park lots when appropriate or at all because real estate is not as liquid as certain other types of assets.

Real estate investments generally cannot be sold quickly, which could limit our ability to adjust our response to changes in economic conditions and affect the timing of sales or leases of rail park lots. This could adversely affect our financial condition and our ability to service debt

Loss of key members of our management team could disrupt our business.

We depend on the continued employment and performance of our senior executives and other key members of our management team. If any of these individuals resigns or becomes unable to continue in his or her present role and is not adequately replaced, our business operations and our ability to implement our growth strategies could be materially disrupted.

The industries in which we compete are highly competitive, and we may not be able to compete effectively with our competitors that have greater financial resources, which could have a material adverse effect on our business, results of operations and financial condition.

The industries in which we operate are highly competitive. Among our competitors are some of the world’s largest chemical companies that have their own raw material resources. Changes in the competitive landscape could make it difficult for us to retain our competitive position. In addition, some of the companies with whom we compete may be able to produce products more economically than we can. Furthermore, most of our competitors have greater financial resources, which may enable them to invest significant capital into their businesses, including expenditures for research and development.

Increases in the price of our primary raw materials may decrease our profitability and adversely affect our liquidity, cash flow, financial condition and results of operations.

The prices we pay for raw materials in our businesses may increase significantly, and we may not always be able to pass those increases through to our customers fully and timely. In the future, we may be unable to pass on increases in our raw material costs, and raw material price increases may erode the profitability of our products by reducing our gross profit. Price increases for raw materials may also increase our working capital needs, which could adversely affect our liquidity

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and cash flow. For these reasons, we cannot assure you that raw material cost increases in our businesses would not have a material adverse effect on our financial condition and results of operations.

The Company will operate in competitive environment which gives rise to operating and market risk exposure.

The Company expects to sell a broad range of products and services in a competitive environment, and to compete for sales on the basis of product quality, price, technology and customer service. Increased levels of competition could result in lower prices or lower sales volume, which could have a negative impact on the Company’s results of operations.

Economic conditions around the world, and in certain industries in which the Company does business, also impact sales prices and volume. As a result, market uncertainty or an economic downturn in the geographic areas or industries in which we sell our products could reduce demand for these products and result in decreased sales volume, which could have a negative impact on our results of operations.

In addition, volatility and disruption of financial markets could limit customers’ ability to obtain adequate financing to maintain operations, which could result in a decrease in sales volume and have a negative impact on our results of operations. The Company’s business operations may also give rise to market risk exposure related to changes in interest rates, commodity prices and other market factors such as equity prices.

Disruptions in production at our processing facilities, both planned and unplanned, may have a material impact on our business, results of operations and/or financial condition.

Manufacturing and mining facilities in our industry are subject to planned and unplanned production shutdowns and outages. Unplanned production disruptions may occur for external reasons including natural disasters, weather, disease, strikes, transportation interruption, government regulation, political unrest or terrorism, or internal reasons, such as fire, unplanned maintenance or other problems. Alternative facilities with sufficient capacity may not be available, may cost substantially more or may take a significant time to increase production or qualify with our customers, each of which could negatively impact our business, results of operations and/or financial condition. Long-term production disruptions may cause our customers to seek alternative supply which could further adversely affect our profitability.

We will expend large amounts of money for environmental compliance in connection with our operations.

We are subject to stringent regulations under numerous U.S. federal, state, local and foreign environmental, health and safety laws and regulations relating to, among other things, the generation, storage, handling, discharge, disposition and stewardship of hazardous wastes and other materials. We will expend substantial funds to comply with such laws and regulations and have established a policy intended to minimize our emissions to the environment. Nevertheless, legislative, regulatory and economic uncertainties (including existing and potential laws and regulations pertaining to climate change) make it difficult for us to project future spending for these purposes and if there are changes to applicable regulatory requirements, we may be required to expend substantial additional funds to remain in compliance.

We are subject to environmental clean-up costs, fines, penalties and damage claims that have been and continue to be costly.

We are subject to the risk of lawsuits and regulatory actions in connection with current and former operations (including divested businesses) for breaches of environmental laws or regulations or in connection with clean-up obligations. Lawsuits and investigations may be initiated by public or private parties under various environmental laws, including with respect to off-site disposal at facilities where we have been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, commonly referred to as CERCLA, or similar laws.

7

Increased concerns regarding the safe use of chemicals in commerce and their potential impact on the environment have resulted in more restrictive regulations from local, state and federal governments and could lead to new regulations.

Concerns regarding the safe use of chemicals in commerce and their potential impact on health and the environment reflect a growing trend in societal demands for increasing levels of product safety and environmental protection. These concerns could manifest themselves in stockholder proposals, preferred purchasing and continued pressure for more stringent regulatory intervention. These concerns could also influence public perceptions, the viability of the Company’s products, the Company’s reputation and the cost to comply with regulations. In addition, terrorist attacks and natural disasters have increased concerns about the security and safety of chemical production and distribution. These concerns could have a negative impact on the Company’s results of operations.

Local, state and federal governments continue to propose new regulations related to the security of chemical plant locations and the transportation of hazardous chemicals, which could result in higher operating costs.

We work with dangerous materials that can injure our employees, damage our facilities and disrupt our operations.

Some of our operations involve the handling of hazardous materials that may pose a risk of fire, explosion, or the release of hazardous substances. Such events could result from terrorist attacks, natural disasters, or operational failures, and might cause injury or loss of life to our employees and others, environmental contamination, and property damage. These events could lead a temporary shutdown of an affected plant, or portion thereof, and we could be subject to penalties or claims as a result. A disruption of our operations caused by these or other events could have a material adverse effect on our results of operations.

Our ability to operate and/or expand our mining operations may be affected by our ability to secure proper permits.

Environmental and zoning regulations have made it increasingly difficult for the aggregates industry to expand existing quarries and to develop new quarry operations. Our mining operations could be materially impacted from being unable to maintain existing permits to operate the quarry or being unable to secure new permits to support the expansion of the quarry.

We may be subject to claims of infringement of the intellectual property rights of others, which could hurt our business.

From time to time, we expect to face infringement claims from our competitors or others alleging that our processes or products infringe on their proprietary technologies. Any claims that our products or processes infringe the intellectual property rights of others, regardless of the merit or resolution of the claims, could cause us to incur significant costs in responding to, defending and resolving the claims, and may divert the efforts and attention of our management and technical personnel from our business. If we are found to be infringing on the proprietary technology of others, we may be liable for damages, and we may be required to change our processes, redesign our products, pay others to use the technology or stop using the technology or producing the infringing product. Even if we ultimately prevail, the existence of the lawsuit could prompt our customers to switch to products that are not the subject of infringement suits.

Risks Related to Our Common Stock and Our Status as a Public Company

We will be required to incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.

As a reporting company under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires us to include an internal control report with the Annual Report on Form 10-K. This report must include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report

8

must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified. Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities.

Achieving continued compliance with Section 404 may require us to incur significant costs and expend significant time and management resources. We cannot assure you that we will be able to fully comply with Section 404. As a result, investors could lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities, as well as subject us to civil or criminal investigations and penalties.

Our founder and directors have voting control over the Company.

Our founders, who are also directors of the Company, have significant ownership of the Company, including a majority of our voting stock. This gives them the ability to control most, if not all, Company decisions.

Our founders as a group own, directly or indirectly, approximately 57% of the Company Class A Common Stock (the Company’s voting capital stock), effectively giving them voting control over most, if not all, decisions submitted to a shareholder vote, including the election of our directors and mergers and other major transactions. Such concentration of ownership and control could have the effect of delaying, deferring or preventing a change in control of the Company even when such a change of control would be in the best interests of the Company’s other shareholders. Accordingly, other investors will have little voice in our management decisions and will exercise very little control over us. In addition, the applicable sections of the Nevada Revised Statutes provide that certain actions must be approved by a specified percentage of shareholders. In the event that the requisite approval of shareholders is obtained, dissenting shareholders would be bound by such vote. Accordingly, no persons should purchase any shares unless they are willing to entrust all aspects of control to our management.

Indemnification rights held by our directors, officers and employees may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers, and employees.

The indemnification obligations provided in our articles of incorporation and our bylaws to our directors and officers could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful, might otherwise benefit us and our shareholders. We may also provide indemnification rights to our employees with similar results.

Trading in our stock is subject to regulatory restrictions that limit a shareholder’s ability to buy and sell our stock.

There is currently no active trading market for our stock, and applicable SEC and other rules may prevent such a market from developing. For example:

● Our stock is categorized as a “penny stock” under applicable SEC rules. SEC rules impose certain sales practice requirements on broker-dealers who sell penny stocks that do not apply to other securities, including a requirement that a broker-dealer deliver a standardized risk disclosure document prior to completing a transaction in a penny stock. Similarly, FINRA places certain restrictions on transactions involving low-priced securities, including our common stock. Our common stock is not listed on any national securities exchange, and it does not currently qualify for listing on any major exchange, including the New York Stock Exchange or Nasdaq.

● We have not timely filed all reports required to be filed by the rules of the SEC, which limits the ability of shareholders to sell our common stock in unregistered transactions in reliance on SEC Rule 144.

Each of these factors limits liquidity in the market for our common stock and may therefore make it more difficult for our shareholders to sell their stock. The lack of trading in our stock may in turn make it more difficult for us to raise capital

9

through issuances of stock, as potential investors may be reluctant to invest given the difficulties they may face if they later choose to sell the stock they purchase.

To date, we have not paid any cash dividends and no cash dividends will be paid in the foreseeable future.

We do not anticipate paying cash dividends on our common stock in the foreseeable future and we may not have sufficient funds legally available to pay dividends. Even if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends. We presently intend to retain all earnings for our operations.

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our articles of incorporation authorize the issuance of up 2,150,000,000 shares, of which 2,000,000,000 are shares of Class A Common Stock, par value $0.001 per share, 100,000,000 are shares of Class B Common Stock, par value $0.001 per share, and 50,000,000 are shares of Preferred Stock, par value $0.001 per share. Our Board of Directors may choose to issue some or all of such shares to acquire one or more companies or properties and to fund our overhead and general operating requirements. The issuance of any such shares may reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our Company.

We are an “emerging growth company” under the JOBS Act of 2012, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

We will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenues exceed $1 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any May 30.

Item 1B.   Unresolved Staff Comments

Not applicable

Item 2.      Properties – Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations

Our principal executive offices are located in Denver, Colorado where we lease approximately 4,648 square feet under an arrangement that expires in February 2022. In Beverly Hills, California we lease approximately 2,238 square feet of office space for management, sales and support staff under an arrangement that expires in January 2022. The Company feels that

10

this space is sufficient until the Company significantly expands operations. The Company through its subsidiary Rail Land Company, LLC, owns an approximate 620-acre parcel of real property located in Bennett, Colorado. 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

Please reference “Cautionary Note Regarding Exploration Stage Status and Use of Certain Mining Terms” in Item 1 related to stage of our mineral explorations, all of which are without reserves, as defined by Guide 7.

Background

RMI, through its subsidiary, RMR Aggregates, Inc., owns 44 mining claims on Bureau of Land Management (BLM) property in Garfield County, Colorado. The mining claims encompass 880 acres (20 acres each) and are for chemical grade limestone found within the Leadville Limestone formation. RMI purchased the mining claims and the associated mining facilities and equipment from CalX Minerals in October of 2016.

The mineral rights are controlled through unpatented mining claims, the extents of which are shown on Figure 1. RMI has the legal right to enter through the provisions of the 1872 Mining Law. The claims grant RMI the right to remove the minerals within each claim under a Plan of Operations which must be approved by the BLM. RMI does not have any surface rights or surface ownership with the claims. However, RMI may conduct surface activities and install structures on the surface so long as the approved Plan of Operations allows. There is no set duration or term to the mining claims. RMI retains the rights to the mining claims through the payment of claim renewal fees, to the BLM, in September of each year. Each of the 44 claims requires an annual renewal fee payment of $165 per claim. RMI is responsible for paying these claim renewal fees each year. All claims are listed below in Table 1.

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There are no active plans for future exploration.

	Claim No.
Claim Name	(CMC-)	Loc. Date	Township	Range	Sec.	Description
Cascade No. 1	251537	5/10/2001	5 South	88 West	31	E/2NE/4SW/4
Cascade No. 2	251538	5/10/2001	5 South	88 West	31	W/2NE/4SW/4
Cascade No. 3	251539	5/10/2001	5 South	88 West	31	W/2SE/4SW/4
Cascade No. 4	251540	5/10/2001	5 South	88 West	31	E/2SE/4SW/4
Chemin No. 1	251541	5/10/2001	5 South	89 West	36	E/2NE/4SE/4
Chemin No. 2	251542	5/10/2001	5 South	89 West	36	W/2NE/4SE/4
Chemin No. 3	251543	5/10/2001	5 South	89 West	36	E/2NW/4SE/4
Chemin No. 4	251544	5/10/2001	5 South	89 West	36	W/2NW/4SE/4
Chemin No. 5	251545	5/10/2001	5 South	89 West	36	W/2SE/4SE/4
Chemin No. 6	251546	5/10/2001	5 South	89 West	36	E/2SW/4SE/4
Chemin No. 7	251547	5/10/2001	5 South	89 West	36	W/2SW/4SE/4
Storm Queen No. 1	276917	12/15/2008	5 South	89 West	36	W/2NW/4NE/4
Storm Queen No. 2	276918	12/15/2008	5 South	89 West	36	E/2NW/4NE/4
Storm Queen No. 3	276919	12/15/2008	5 South	89 West	36	W/2NE/4NE/4
Storm Queen No. 4	276920	12/15/2008	5 South	89 West	36	E/2NE/4NE/4
Storm Queen No. 5	276921	12/15/2008	5 South	88 West	31	W/2NW/4NW/4
Storm Queen No. 6	276922	12/15/2008	5 South	88 West	31	E/2NW/4NW/4
Storm Queen No. 7	276923	12/15/2008	5 South	88 West	31	W/2NE/4NW/4
Storm Queen No. 8	276924	12/15/2008	5 South	89 West	36	E/2SE/4NW/4
Storm Queen No. 9	276925	12/15/2008	5 South	89 West	36	W/2SW/4NE/4
Storm Queen No. 10	276926	12/15/2008	5 South	89 West	36	E/2SW/4NE/4
Storm Queen No. 11	276927	12/15/2008	5 South	89 West	36	W/2SE/4NE/4
Storm Queen No. 12	276928	12/15/2008	5 South	89 West	36	E/2SE/4NE/4
Storm Queen No. 13	276929	12/15/2008	5 South	88 West	31	W/2SW/4NW/4
Storm Queen No. 14	276930	12/15/2008	5 South	88 West	31	E/2SW/4NW/4
Storm Queen No. 15	276931	12/15/2008	5 South	88 West	31	W/2SE/4NW/4
Storm Queen No. 16	276932	12/15/2008	5 South	89 West	36	W/2NE/4SW/4
Storm Queen No. 17	276933	12/15/2008	5 South	89 West	36	E/2NE/4SW/4
Storm Queen No. 18	276934	12/15/2008	5 South	88 West	31	W/2NW/4SW/4
Storm Queen No. 19	276935	12/15/2008	5 South	88 West	31	E/2NW/4SW/4
Storm Queen No. 20	276936	12/15/2008	5 South	89 West	36	W/2SE/4SW/4
Storm Queen No. 21	276937	12/15/2008	5 South	89 West	36	E/2SE/4SW/4
Storm Queen No. 22	276938	12/15/2008	5 South	89 West	36	E/2ES/4SE/4
Storm Queen No. 23	276939	12/15/2008	5 South	88 West	31	W/2SW/4SW/4
Storm Queen No. 24	276940	12/15/2008	5 South	88 West	31	E/2SW/4SW/4
Storm Queen No. 25	276941	12/15/2008	5 South	89 West	4	W/2NW/4NE/4
Storm Queen No. 26	276942	12/15/2008	5 South	89 West	4	E/2NW/4NE/4
Storm Queen No. 27	276943	12/15/2008	5 South	89 West	4	W/2NE/4NE/4
Storm Queen No. 28	276944	12/15/2008	5 South	89 West	4	E/2NE/4NE/4
Storm Queen No. 29	276945	12/15/2008	5 South	89 West	3	W/2NW/4NW/4
Storm Queen No. 30	276946	12/15/2008	5 South	89 West	3	E/2NW/4NW/4
Oasis No. 1	290391	4/5/2018	5 South	89 West	24	S/2NE/4NW/4
Oasis No. 2	290392	4/5/2018	5 South	89 West	24	W/2NW/4NW/4
Oasis No. 3	290393	4/5/2018	5 South	89 West	24	E/2NW/4NW/4

Table 1 – RMI mining claims

RMI operates the Mid-Continent Quarry on 6 of the 44 BLM mining claims it owns. RMI is permitted by the BLM and Colorado Division of Reclamation Mining and Safety (the “DRMS”) to operate and extract limestone from the six claims

12

in which the Mid-Continent Quarry is located. The six claims cover a total of 120 acres. RMI operates the quarry within a 38-acre boundary stipulated by its CO DRMS permit.

Additionally, RMI has additional exploration property consisting of the remaining 38 mining claims (760 acres) not currently included with the Mid-Continent Quarry. This property surrounds the Mid-Continent Quarry property with the majority of the acreage existing to the north and east of the Mid-Continent Limestone Quarry property (see Figure 1).

The boundaries of the Mid-Continent Quarry and the exploration property follow the boundaries of the mining claims on which they are located.

Figure 1 - Mid-Continent Quarry area map with mining claims

Location and Access

The Mid-Continent Quarry is located about 1 mile north of the city of Glenwood Springs in Garfield County, Colorado. Access to the quarry is provided by a BLM dirt road called Transfer Trail.

The terrain of the location is dominated by a hillside with a slope that ranges between 2H:1V and 3H:1V. Vegetation is mostly composed of sparse grasses, shrubs, and evergreen trees.

13

Geology and Mineralization

The quarry area is located in the Leadville Limestone formation and is bound by an unnamed fault to the north and the West Glenwood Fault to the south. The limestone outcrops to the east and to the west creating a natural boundary for the edges of the deposit. The deposit is roughly tabular in nature, with a west-northwest to east-southeast strike and 10-30° dip to the south-southwest. The Leadville Limestone formation ranges from approximately 150-175 feet thick in the quarry area.

Facilities

RMI owns a limestone milling facility located within the 38-acre mining boundary. Additionally, RMI owns and operates various pieces of crushing, screening, and heavy mobile equipment used for extracting and sizing the limestone in the quarry.

Current Status

Shortly after RMI purchased the property, extensive site cleanup was performed. RMI performs daily activities related to the production of limestone. This work includes blasting rock, transporting rock with excavators and front-end loaders and crushing and screening rock into usable sized pieces. To perform these activities, RMI has incurred costs, and will continue to incur costs. These costs include payment for supplies, equipment, labor, and other associated expenses related to the extraction of limestone.

The power at the site is provided by Glenwood Springs Utilities. RMI does not have a direct water connect and utilizes water transported to the site and purchased from nearby locations for all water needs. The quarry is currently in excellent working condition.

Exploration of Property

RMI has not performed any exploration drilling of its own on the property outside of the quarry. RMI has performed surface sampling of the limestone on sections of this property. Testing results from the surface sampling have shown the limestone in this property to be nearly identical in nature to the chemical grade limestone found in the quarry.

Historical exploration drilling, occurring between 1958-1976, took place over large sections of the property outside of the quarry. Testing results from this drilling show the existence of chemical grade limestone like the limestone found in the quarry. There are no active plans for future exploration.

The costs associated with our properties can be found in Note F to our consolidated financial statements.

Item 3.      Legal Proceedings

Rocky Mountain Industrials, Inc. and its wholly owned subsidiary RMR Aggregates, Inc. has a filed a lawsuit pending in the District Court of Garfield County, Colorado.  The defendants include Garfield County and also the City of Glenwood Springs which voluntarily intervened.  The claims include a request for judicial review of two Notices of Violation issued by Garfield County in 2019 and 2020 and the related decision of the Board of County Commissioners (“BOCC”) at a public meeting on April 22, 2019.  RMI had also asserted related claims in federal court for violation of its Constitutional rights to procedural and substantive due process under 42 U.S.C. Sec. 1983 and for declaratory and injunctive relief due to preemption under federal law (the “Federal Claims”).  By stipulation of the parties, the federal court lawsuit was dismissed, and all of the Federal Claims were added to the state lawsuit in Garfield County District Court.  RMI is not presently seeking monetary damages because Garfield County has thus far not sought to enforce its Notices of Violation, but RMI has reserved the right to seek monetary damages in the future.

14

Item 4.      Mine Safety Disclosures

The operation of the Mid-Continent Quarry is subject to regulation by MSHA under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects the quarry on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Whenever MSHA issues a citation or order, it also generally proposes a civil penalty, or fine, related to the alleged violation. Citations or orders can be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), the Company is required to present information regarding certain mining safety and health citations which MSHA has issued with respect to its aggregates mining operations in its periodic reports filed with the SEC. In evaluating this information, consideration should be given to factors such as: (i) the number of citations and orders will vary depending on the size of the quarry or mine and type of operations (underground or surface), (ii) the number of citations issued will vary from inspector to inspector and location to location, and (iii) citations and orders can be contested and appealed, and in that process, may be reduced in severity and amount, and are sometimes dismissed.

The Company presents the following items regarding certain mining safety and health matters for the fiscal year ended March 31, 2021:

●Total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under section 104 of the Mine Act for which the Company received a citation from MSHA ( a “Section 104 S&S Citations”). If MSHA determines that a violation of a mandatory health or safety standard is reasonably likely to result in a reasonably serious injury or illness under the unique circumstance contributed to by the violation, MSHA will classify the violation as a “significant and substantial” violation (commonly referred to as a “S&S” violation).

●Total number of orders issued under section 104(b) of the Mine Act (“Section 104(b) Orders”). These orders are issued for situations in which MSHA determines a previous violation covered by a Section 104(a) citation has not been totally abated within the prescribed time period, so a further order is needed to require the mine operator to immediately withdraw all persons (except certain authorized persons) from the affected area of a quarry or mine.

●Total number of citations and orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under Section 104(d) of the Mine Act (“Section 104(d) Citations and Orders”). These violations are similar to those described above, but the standard is that the violation could significantly and substantially contribute to the cause and effect of a safety or health hazard, but the conditions do not cause imminent danger, and the MSHA inspector finds that the violation is caused by an unwarranted failure of the operator to comply with the health and safety standards.

●Total number of flagrant violations under section 110(b)(2) of the Mine Act (“Section 110(b)(2) Violations”). These violations are penalty violations issued if MSHA determines that violations are “flagrant”, for which civil penalties may be assessed. A “flagrant” violation means a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury.

●Total number of imminent danger orders issued under section 107(a) of the Mine Act (“Section 107(a) Orders”). These orders are issued for situations in which MSHA determines an imminent danger exists in the quarry or mine and results in orders of immediate withdrawal of all persons (except certain authorized persons) from the area of the quarry or mine affected by its condition until the imminent danger and the underlying conditions causing the imminent danger no longer exist.

●Total dollar value of MSHA assessments proposed. These are the amounts of proposed assessments issued by MSHA with each citation or order for the time period covered by the report. Penalties are assessed by MSHA according to a formula that considers a number of factors, including the mine operator’s history, size, negligence,

15

gravity of the violation, good faith in trying to correct the violation promptly, and the effect of the penalty on the operator’s ability to continue in business.

●Total number of mining-related fatalities. Mines subject to the Mine Act are required to report all fatalities occurring at their facilities unless the fatality is determined to be “non-chargeable” to the mining industry.

●Receipt of written notice from MSHA of a pattern (or a potential to have such a pattern) of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of other mine health or safety hazards under section 104(e) of the Mine Act. If MHSA determines that a mine has a “pattern” of these types of violations, or the potential to have such a pattern, MSHA is required to notify the mine operator of the existence of that fact.

●Legal actions pending as of the last day of the reporting period, initiated during the reporting period and resolved during the reporting period.

●The Federal Mine Safety and Health Review Commission (the “Commission”) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. The cases may involve, among other questions, challenges by operators to citations, orders and penalties they have received from MSHA, or complaints of discrimination by miners under Section 105 of the Mine Act. The table below shows as of March 31, 2021, the number of legal actions pending before the Commission, and the number of legal actions initiated before the Commission during the year as well as the number of such actions resolved during the year.

Received

Received

Notice of

Notice of

Citation

Total

Pattern

Potential

Contests

Section

Total

Number

of

to have

Pending

Citation

Citation

104(d)

Dollar

of

Violation

Pattern

as of

Contests

Contests

Section

Section

Citations

Section

Section

Value of

Mining

Under

under

Last

Instituted

Resolved

104 S&S

104(b)

and

110(b)(2)

107(a)

MSHA

Related

Section

Section

Day of

During

During

MSHA

Citations

Orders

Orders

Violations

Orders

Assessment/

Fatalities

104(e)

104(e)

Period

Period

Period

Location

ID

(#)

(#)

(#)

(#)

(#)

$Proposed

(#)

(yes/no)

(yes/no)

(#)

(#)

(#)

Mid-Continent Quarry

0504954

—

—

—

—

—

$

123

—

no

no

—

16

PART II

Item 5.      Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our Class B Common Stock is currently quoted on the Over the Counter Market under the symbol “RMRI”. No shares of Class B Common Stock have traded on the Over the Counter Market to date.

Dividends

We plan to retain any earnings for the foreseeable future for our operations. We have never paid any dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends on common stock will be at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements and such other factors as our board of directors deems relevant.  The Company has outstanding Series A-1 and A-2 Preferred Stock that accrue dividends.

Recent Issuance of Unregistered Securities

We issued the following unregistered securities during the year ended March 31, 2021:

● Conversion of 338,343 shares of Class B Common Stock for 50.75 shares of Series A-3 Preferred Stock

● We issued 444,456 shares of Class B Common Stock for compensation

● We issued 5 shares of Series A-1 Preferred Stock for services

● We issued 19.45 shares of Series A-2 Preferred Stock, 2 of those 19.45 shares to settle Preferred shares debt, and 2.5 of the 19.45 shares to settle an outstanding notes payable

● We issued 40,300 shares of Class B Common Stock for services, and issued 60,000 shares of Class B Common Stock upon exercise of warrants, and issued 24,000 shares of Class B Common Stock for Board compensation

We relied on an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 4(a)(2) of the Securities Act with respect to the foregoing issuance.

Item 6.      Selected Financial Data

Not applicable.

Item 7.      Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

All statements in this report other than statements of historical fact are “forward-looking statements”. Such forward-looking statements include, but are not limited to, those relating to the following: our ability to secure necessary financing; fluctuations in interest rates; our ability to continue to grow and implement growth strategies, and future cash needs and operations and our business plans.

When used in this document, the words “anticipate,” “estimate,” “expect,” “may,” “plans,” “project,” and similar expressions are intended to be among the statements that identify forward-looking statements. Our results may differ significantly from the results discussed in the forward-looking statements. Such statements involve risks and uncertainties,

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including, but not limited to, those relating to costs, delays and difficulties related to our ability to attract and retain skilled managers and other personnel; the intense competition within our industry; the uncertainty of our ability to manage and continue our growth and implement our business strategy; our vulnerability to general economic conditions; accuracy of accounting and other estimates; our future financial and operating results, cash needs and demand for services; and our ability to maintain and comply with permits and licenses; as well as other risk factors described in this Report. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those projected.

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 February 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.

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 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.

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.

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Critical Accounting Policies and 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.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. As of March 31, 2021, the Company views its operations and manages its business as two operating segments, Aggregates and Rail Park.

Cash and Cash Equivalents

The Company considers all highly liquid securities with original maturities of three months or less at the date of purchase to be cash equivalents. As of March 31, 2021, the Company had cash of approximately $1,622,000 and no cash equivalents. The Company may occasionally maintain cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation. The amounts are held with major financial institutions and are monitored by management to mitigate credit risk.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. Any impairment losses are measured and recorded based on discounted estimated future cash flows and are charged to income on the Company’s consolidated statements of operations. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates of future cash flows are based on numerous assumptions, including expected commodity prices, production levels, capital requirements and estimated salvage values. It is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable material, future commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties. As of March 31, 2021, the Company’s mineral resources do not meet the definition of proven or probable reserves or value beyond proven or probable reserves and any potential revenue has been excluded from the cash flow assumptions. Accordingly, recoverability of the long-lived assets’ capitalized cost is based primarily on estimated salvage values or alternative future uses.

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

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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 as follows:

- 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

Revenue Recognition

As of January 1,2018, we adopted ASU NO. 2014-09, “Revenue from Contracts with Customers” Topic 606. The Company recognizes revenues upon delivery of goods to the customer at which time the Company’s performance obligation is satisfied at an amount that the Company expects to be entitled to in exchange for those goods in accordance with the five step analysis outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied.

Revenue includes product sales of limestone, aggregate materials and other transportation charges to customers net of discounts, allowance or taxes, as applicable.

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 March 31, 2021, the Company’s undiscounted reclamation obligations totaled approximately $222,000, which 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 operating expenses. The fair value is based on our estimate 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 that 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.

Net Loss per Common Share

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders, after deducting preferred dividends, by the weighted average number of common shares outstanding during the period, without consideration of the potentially dilutive effects of converting stock options or restricted stock purchase rights outstanding. Diluted net loss per common share is calculated by dividing the net loss attributable to common stockholders 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

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periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common shares are not assumed to have been issued, as their effect is anti-dilutive.  

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases of the Company’s assets and liabilities and their financial statement reported amounts. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

A valuation allowance is recorded by the Company when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made.

Additionally, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Accordingly, the Company establishes reserves for uncertain tax positions. The Company has not recognized interest or penalties in its statement of operations and comprehensive loss since inception.

Recent Accounting Pronouncements

Refer to Note 2 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion.

Results of Operations for the Fiscal Year Ended March 31, 2021 compared to the Fiscal Year Ended March 31, 2020

	Years ended March 31,
	2021		2020
Revenue	$	680,225	$	1,084,113
Cost of goods sold		699,087		955,901
Gross profit		(18,862)		128,212
Selling, general and administrative		12,132,761		11,856,820
Loss from operations		(12,151,623)		(11,728,608)
Gain on sale of assets		6,417,744		18,000
Interest expense, net		(799,072)		(257,701)
Loss before income tax provision		(6,532,951)		(11,968,309)
Income tax expense		—		861
Net loss from continuing operations		(6,532,951)		(11,967,448)
Net loss from discontinued operations		(1,393,530)		(584,936)
Net Loss	$	(7,926,481)	$	(12,552,384)

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Revenues

Revenues for the year ended March 31, 2021 were, $680,225, compared to sales of $1,084,113 for the same period in the year ended March 31, 2020.  The decrease in revenues from the prior year is a result of reduced customer sales.

Cost of Goods Sold

Cost of goods sold for the year ended March 31, 2021, was $699,087, compared to $955,901 for the year ended March 31, 2020.  The decrease in cost of goods sold corresponds to the reduction in associated revenues.

Selling, general and administrative

Operating expenses for the year ended March 31, 2021 were $12,132,761, compared to operating expenses for the year ended March 31, 2020 of $11,856,820. Selling, general and administrative expenses consisted of corporate overhead costs related to mining operations, consulting services from related parties, public company costs and amortization of intangible assets.  The increase is primarily related to the Company increasing staffing largely in relation to the Company’s Rail Park project.

Interest expense, net

Interest increased as a result of an increase in average outstanding debt and higher  average interest rates during the year.

Liquidity and Capital Resources

As of March 31, 2021, we had current assets of $5,876,052, total current liabilities of $8,475,523 and a working capital deficit of $2,599,471. We have incurred an accumulated loss of $57,367,534 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 over the last 12 months 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: 

1. 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.  

2. 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.  

3. 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%.  

4. 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).  

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5. 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. 

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

Off-Balance Sheet Arrangements

None.

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 8.      Financial Statements and Supplementary Data

See Index to Consolidated Financial Statements on page 39.

Item 9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.   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.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company maintains internal controls over financial reporting that are designed to ensure that information required to be disclosed in the Company’s SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the internal controls over financial reporting, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and with the participation of management, including the Company’s principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included an assessment of the design of the Company’s internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of

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March 31, 2021, our internal controls over financial reporting were not effective at the reasonable assurance level due to the material weakness discussed below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure that our consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the 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.

This report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this report.

Material Weakness and Related Remediation Initiatives

Our principal executive officer and principal financial officer concluded that as of March 31, 2021, due to the Company’s budget constraints, the Company’s accounting department does not maintain the number of accounting personnel (either in-house or external) necessary to ensure more complete and effective financial reporting controls. Due to this situation, 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.

It is reasonably possible that, if not remediated, this material weakness could result in a material misstatement in our reported financial statements in a future annual or interim period. We are developing an action plan for this material weakness, which involves hiring qualified accounting personnel and establishing a formal audit committee. We are uncertain at this time of the costs required to remediate the material weakness.

Because the remedial actions will require the hiring of additional personnel, and extensive reliance on manual review and approval, the successful operation of the controls for at least several quarters may be required 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 effective internal control over our financial reporting, 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.

Inherent Limitations on the Effectiveness of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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Changes in Internal Control over Financial Reporting

The following change in our internal control over financial reporting will materially affect, or is reasonably likely to materially affect, our internal control over financial reporting. The Company subsequently employed a dedicated Chief Financial Officer in March 2021. Part of the role of the Chief Financial Officer is to address the Company’s compliance with new accounting pronouncements and to work to implement and establish applicable controls and processes within the organization.

Item 9B.   Other Information

None.

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PART III

Item 10.   Directors, Executive Officers and Corporate Governance

Our directors and executive officers are as follows:

Name	Age	Position
Chad Brownstein	48	Chairman
Gregory Dangler	39	Executive Vice Chairman
Adrian Fairbourn	51	Director
Barry Munitz	79	Director
Brandon Pilot	30	Director
Brian Fallin	47	Chief Operating Officer
Brian Aratani	60	Chief Financial Officer

Chad Brownstein is our Chairman of the Board of Directors. He is responsible for board oversight of the RMI corporate strategy . Mr. Brownstein has been Director of the Company since 2014. Since 2008, Mr. Brownstein has been a partner at Rocky Mountain Resource Holdings, a natural resource operating and investment company, and/or its predecessors or affiliates. Previously, from 2009 to 2017, Mr. Brownstein was a board member of the Banc of California. Mr. Brownstein is either a current or past member of the Cedars Sinai Board of Governors, Los Angeles Conservation Corps, and The Palisades Group LLC, a Banc of California Company. Mr. Brownstein attended Columbia Business School and received his B.A. from Tulane University. We believe Mr. Brownstein’s extensive experience with investments and acquisitions will bring value to the Company as we seek to grow our business.

Gregory Dangler Mr. Dangler serves as Director of the Company since 2014. Mr. Dangler is responsible for the day-to-day operations and corporate financial strategy of the Company. Since 2008, Mr. Dangler has been a partner at Rocky Mountain Resource Holdings and/or its predecessors or affiliates. Previously, from 2012-2014, Mr. Dangler held multiple positions, including Chief Restructuring Officer at Prospect Global Resources, a natural resource development company. Prior to that, in 2009, Mr. Dangler founded a venture-backed technology company. As the chief executive of that company, he raised institutional capital and expanded the company’s global presence with operating interests in Africa and South America. From 2006 to 2007, Mr. Dangler was an associate with ITU Ventures, a venture capital firm, making venture and growth investments. While with ITU, Mr. Dangler executed private and public equity transactions, directed M&A activity, and provided strategic support to portfolio companies. In 2000, Mr. Dangler began his career in the U.S. Air Force and by 2004 was managing complex infrastructure projects. Mr. Dangler received a B.S. in Mechanical Engineering from the United States Air Force Academy and an M.B.A. from the University of Southern California’s Marshall School of Business. We believe Mr. Dangler’s knowledge and experience in the industrial resources industry and with emerging growth companies will help to further the Company’s goals and business efforts.

Adrian Fairbourn has served as a director on our Board since January 2021 having already been a major early investor in the business. Adrian began his career as an investment analyst at Parson Penny and Co in Edinburgh in 1995 and Quilter Goodison in London before moving in 1998 to build and manage the highly successful alternative investments operation at Bank of Bermuda. For the 5 years up to 2007 he managed a multi-family office in London, responsible for hedge fund investments, and direct investments and also asset-raising for co-investment opportunities. He started Exception Capital in 2007 and has developed the business into a multi-family office managing European and American families. The focus is on finding exceptional investment opportunities for high net worth families. Since September 2012 he has been managing the multi award-winning Family Fund, which is anchored by a Milan based family. Exception Capital has previously won the ‘Excellence in Investment Management’ award at the Alternative Investment Awards and Adrian was named ‘Gamechanger of the Year (Investment Management)’ in the ACQ Global Awards 2015. He has successfully completed over $1billion of structuring, capital and fund- raising projects for several private companies and alternative funds. In addition, he sits on a number of public and private company boards in the U.S and U.K. and has lived and worked in Asia, Europe, the U.K and is now based in Los Angeles. Adrian was educated in the UK and the US as an English Speaking Union Schoolboy Scholar. An undergraduate degree from Hull University was followed by an MSc from Heriot-Watt University in Edinburgh. He is a Member of the U.K Securities Institute and accredited by the UK’s Financial Services Authority and FINRA in the U.S.

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Barry Munitz was nominated and appointed as a director on our Board in March 2018. Dr. Munitz is Chancellor Emeritus of the California State University System, President of the Cotsen Foundations for the Art of Teaching and for Academic Research, Vice Chair of the Broad Family Education Foundation, and Senior Advisor to the Milken Institute. Previously, Dr. Munitz served as President and CEO of the J. Paul Getty Trust, overseeing the Trust’s two museums, its Foundation and its Research and Conservation Institutes, and managing its endowment portfolio. At California State University, he supervised the system’s expansion from 18 to 23 campuses. The system now has student enrollment in excess of one half million and more than 50,000 employees. As a corporate executive for a decade, he was President of Federated Development, and vice chairman of the publicly held Maxxam Corporation, a natural resources, finance, and real estate holding company. Dr. Munitz was the founding (and the only) chair of California’s P-16 Council, a group of education, business, and community leaders charged with developing strategies to improve education from preschool through post-graduate, while also chairing the California Education Roundtable. He was a Trustee of the Courtauld Institute in London, is a founding board member of Sherry Lansing’s EnCorps board, and was a 20-year director at Navient (formerly Sallie Mae), was a public director of the Sun America Corporation, Kaufman & Broad, and LeapFrog Incorporated, and chaired the board of trustees at Sierra Nevada College and the American Council of Education. Dr. Munitz is a member of the American Academy of Arts and Sciences, and held the White House seat on the Congressional Higher Education Cost Commission. He was Chancellor of the University of Houston and academic vice president of the University of Illinois system. He received a Ph.D. in comparative literature from Princeton University, a Baccalaureate degree at Brooklyn College, and holds honorary degrees from Whittier College, Claremont Graduate University, the California State University, the University of Southern California, Notre Dame, Pepperdine, and the University of Edinburgh. We believe that Dr. Munitz’s education and management experience make him a valuable member of the Company’s board of directors.

Brandon Pilot was nominated and appointed as a director on our Board in March 2018. Mr. Pilot is a Partner at Bienville Capital, a New York based investment firm. He serves on the investment team focused on the firm’s private capital opportunities and works closely with several of Bienville’s family office relationships. Prior to Bienville, Mr. Pilot worked on the investment team for a single family office. Prior to that, Mr. Pilot worked as an Analyst at Founders Investment Banking, a middle-market investment bank focused on the industrial services sector. Mr. Pilot earned a Master’s Degree in Business Administration with a concentration in Finance, and a Bachelor’s Degree in Business Management, from The University of Alabama. Mr. Pilot is on the Board of Outback America and is a Co-founder of the Believe UA Mentoring Program. We believe that Mr. Pilot’s education and investing experience make him a valuable member of the Company’s board of directors.

Brian Fallin Since January 2021, Mr. Fallin has served as Chief Executive Officer at RMI. He has 22 years of sales and operational experience within the construction materials industry. Mr. Fallin is responsible for overseeing the field sales effort, sales strategy and process, and overall revenue generation. Most recently, he spent 17 years with PrimeSource Building Products, a $1.4 billion-dollar private equity owned building materials distribution company. With PrimeSource, Mr. Fallin held several senior level roles such as Region Vice President and Vice President of Field Sales. Mr. Fallin began his career working for Georgia Pacific Corp. in Supply Chain and Sales and holds a Bachelor’s degree in Marketing from the University of Colorado in Boulder, Colorado.

Brian Aratani Mr. Aratani joined the Company in March of 2021 and serves as Chief Financial Officer. Prior to joining the Company Mr. Aratani was with Resources Global Professionals (RGP), a global consulting firm. While at RGP, Mr. Aratani provided financial reporting and accounting policy consultation services to public and private entities in a variety of industries, Mr. Aratani has over 25 years of financial and operational leadership experience with a wide range of companies including Fortune 50 multinationals. As CFO and a C-level executive, Mr. Aratani has managed and been responsible for financial activities of companies, including financial reporting, financial planning and analysis, treasury and cash management. Mr. Aratani began his career with Deloitte & Touche encompassing over 15 years including 3 years as an audit partner. He is a member of the American Institute of CPAs and Colorado Society of CPAs., and received a Bachelor’s degree in Accounting from Colorado State University and is a Certified Public Accountant.

Family Relationships

There are no family relationships among our directors or executive officers. Brownstein Hyatt Farber Schreck, LLP, whose Chairman of the Board, Norman Brownstein, is the father of our Chairman of the Board, provides services to the Company.

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Legal fees paid by the Company to Brownstein Hyatt Farber Schreck, LLP in the year ended March 31, 2021, were $266,050.

Board Composition

Our By-Laws provide that the Board of Directors shall consist of not less than one (1) nor more than fifteen (15) directors. Each director of the Company serves until his successor is elected and qualified, subject to removal by the Company’s majority shareholders. Officers shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined by the Board of Directors, and each officer shall hold his office until his successor is elected and qualified, or until his earlier resignation or removal.

Audit Committee

Our Board of Directors has not established a separate audit committee within the meaning of Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Instead, the entire Board of Directors acts as the audit committee and will continue to do so until such time as a separate audit committee is established.

Code of Ethics

The Company has adopted a Code of Ethics applicable to all Company directors, officers and employees which is available upon written request to the Company at c/o Rocky Mountain Industrials, Inc., 4601 DTC Blvd., Suite 130, Denver, Colorado, 80237.

Potential Conflicts of Interest

Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our Board of Directors as a whole. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation and audit issues that may affect management decisions.

Involvement in Certain Legal Proceedings

No director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.

Nominations to the Board of Directors

Our directors play a critical role in guiding our strategic direction and oversee the management of the Company. Board candidates are considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of the shareholders, diversity, and personal integrity and judgment

In addition, directors must have time available to devote to Board activities and to enhance their knowledge in the growing business. Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the Company.

In carrying out its responsibilities, the Board will consider candidates suggested by shareholders. If a shareholder wishes to formally place a candidate’s name in nomination, however, he or she must do so in accordance with the provisions of the Company’s Bylaws. Suggestions for candidates to be evaluated by the directors must be sent to the Board of Directors, c/o Rocky Mountain Industrials, Inc., 4601 DTC Blvd., Suite 130, Denver, Colorado.

During the year ended March 31, 2021, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our Board of Directors.

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Board Leadership Structure and Role on Risk Oversight

Chad Brownstein, Gregory Dangler, Adrian Fairbourn, Barry Munitz and Brandon Pilot comprise our Board of Directors, with Mr. Brownstein serving as our Chairman of the Board of Directors. We have determined this leadership structure is appropriate for us based on our existing operations. The Board of Directors will continue to evaluate our leadership structure and modify as appropriate based on our size, resources and operations.

Our Board of Directors has formed a Mergers and Acquisition Risk Committee and a Financial Risk Committee comprised of several board members and officers of RMI. These committees meet quarterly.

Item 11.   Executive Compensation

The following table sets forth information concerning the annual and long-term compensation awarded to, earned by, or paid to the named executive officers and directors for all services rendered in all capacities to our Company for the fiscal years ended March 31, 2021 and 2020:

SUMMARY COMPENSATION TABLE

							Change in
							Pension Value
							and Non-
						Non-Equity	Qualified
						Incentive	Deferred
				Stock	Option	Plan	Compensation	All Other
		Salary	Bonus	Awards	Awards	Compensation	Earnings	Compensation	Total
Name & Principal Position	Year	($)	($)	($)	($)	($)	($)	($)(3)	($)
Chad Brownstein	2021	59,375	—	—	—	—	—	420,000	479,375
(1)Board Chairman	2020	75,000	—	—	—	—	—	420,000	495,000
Gregory Dangler	2021	59,375	—	—	—	—	—	420,000	479,375
(2)Executive Vice Chairman	2020	75,000	—	—	—	—	—	420,000	495,000
Brian Fallin	2021	41,667	—	—	—	—	—	—	41,667
Chief Executive Officer
Brian Aratani	2021	12,879	—	—	—	—	—	—	12,879
Chief Financial Officer

(1) Mr Brownstein was CEO during the fiscal Year ended March 31, 2020

(2) Mr Dangler was President during the fiscal Year ended March 31, 2020 and through January 2021

(3) For Mr. Dangler, compensation is related to his consultancy agreement and Mr. Brownstein, compensation as Non-Executive Board Chairman

On October 15, 2014, RMR IP (now known as RMR Logistics, Inc. (RMRL)), the Company’s subsidiary, entered into consulting agreements with each of Gregory Dangler, who is our current President, and Chad Brownstein, who is our current Chief Executive Officer, pursuant to which each of Mr. Dangler and Brownstein would provide services related to their roles as executive officers of the Company. The Company has accrued $1,311,250 for unpaid officers’ compensation expense in accordance with such consulting agreements through March 31, 2021. 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.

On October 15, 2014, RMRL entered into consulting agreements with each of Principio Management LLC, which holds 9,499,657 shares of Class A Common Stock of the Company (26.55%), and 77727111, LLC, is the owner of 10,791,701 shares of Class A Common Stock of the Company (30.16%), relating to certain services provided by each of these entities. Mr. Dangler is the sole owner of Principio Management LLC and Mr. Brownstein is the sole owner of 77727111, LLC.

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On January 31, 2020 the consulting agreement October 15, 2014 between Chad Brownstein and the Company was terminated. On January 31, 2020 the board resolved to pay Chad Brownstein monthly compensation of $35,000 a month for his services as Non-Executive Board Chairman.

On January 31, 2020, the Company entered into an employment agreement with Chad Brownstein for his Non-Executive services provided to the Company. The employment contract made be terminated at any time.

On February 1, 2015, RMRL entered into a management services agreement with Industrial Management LLC (“IM”), to provide services to RMRL and affiliated entities, which include assistance in operational and administrative matters, identifying, analyzing, and structuring growth initiatives, and potential strategic acquisitions. Chad Brownstein is a Manager of IM. As compensation for these services, RMRL will pay to IM an annual cash management fee in an amount equal to the greater of 2% of the Company’s annual gross revenues or $1,000,000, and a development fee with respect to any capital project incurred by RMRL equal to 2% of total project costs. In addition, IM has the option to be assigned all available royalties from RMRL’s mineral holdings, leases or interests greater than 75% of net revenue interests for all mineral rights or production of minerals. At IM’s sole discretion, it may choose to accept a preferred convertible security with a 15% dividend accruing quarterly in lieu of cash for some or all of the annual management fee, development fee and royalty assignments. Such preferred convertible securities shall be convertible into either Class A Common Stock or Class B Common Stock (as applicable) at a conversion price equal to fifty percent of the market price of the applicable Class B Common Stock on the day prior to the date of issuance. In addition, these preferred convertible securities are callable for cash for a period of six months following the date of issuance; provided, however, that if called, IM shall have the option to convert the called preferred stock into either Class A Common Stock or Class B Common Stock (as applicable) at a conversion price equal to sixty-six and two thirds percent of the market price of the applicable Class B Common Stock on the business day immediately preceding the issuance date of preferred stock, and will include a blocker provision. In connection with the management services agreement with IM, RMRL entered into a registration rights agreement which requires RMR IP to register for resale any securities issued as consideration under the management services agreement. The registration rights agreement provides for both demand and piggy back registration rights, and requires that IM not transfer any shares of RMRL during a 90 day period following the effective date of a registration statement. The registration rights agreement terminates when the shares held by IM become eligible for resale pursuant to Rule 144. On January 30, 2018, the Company entered into an Asset Purchase Agreement with IM and consummated the purchase of all the assets of IM, including any accrued payments payable to IM, for a total consideration of 882,352 shares of the Company’s Class B Common Stock. The share consideration represents an estimated fair value of $15,000,000. Following the closing of the transaction, the Company had no remaining liabilities or accrued payments owed to IM.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

	Option Awards
			Equity Incentive Plan
	Number of Securities	Number of Securities	Awards: Number of
	Underlying	Underlying	Securities Underlying
	Unexercised Options	Unexercised Options	Unexercised Unearned	Option Exercise	Option Expiration
Name	(#) Exercisable	(#) Unexercisable	Options (#)	Price ($)	Date
Chad Brownstein	0	0	0	—	—
Gregory Dangler	0	0	0	—	—

(1) No options or other equity awards have been issued to Mr. Brownstein or Mr. Dangler.

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Director Compensation

The following table sets forth with the compensation paid to our non-management directors in the fiscal year ended March 31,2021.

					Qualified
	Fees Earned			Non-Equity	Deferred
	or Paid in		Option	Incentive Plan	Compensation	All Other
	Cash	Stock Awards	Awards	Compensation	Earnings	Compensation	Total
Name	($)	($)(1)	($)	($)	($)	($)	($)
Adrian Fairbourn	—	200,000	—	—	—	—	200,000
Barry Munitz	—	200,000	—	—	—	—	200,000
Brandon Pilot	—	200,000	—	—	—	—	200,000

1) Represents the estimated grant date fair value of the 8,000 restricted shares granted to each of the directors named in the table during the year ended March 31, 2021.

We have no pension, annuity, bonus, insurance, stock options, profit sharing, or similar benefit plans. No stock options or stock appreciation rights have been granted to any of our directors or executive officers; none of our directors or executive officers exercised any stock options or stock appreciation rights; and none of them hold unexercised stock options.

Outstanding Equity Awards

As of March 31, 2021, there were 249,185 shares of stock awards outstanding for our directors and officers.

Compensation of Directors

Other than as disclosed in the compensation table above, our directors do not receive compensation for their services as directors.

Potential Payments Upon Termination or Change-in-Control

None.

Employment Agreements

See Exhibit Number 10.6.

Compensation Committee Interlocks and Insider Participation

No interlocking relationship exists between our board of directors and the board of directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.

The following table sets forth certain information with respect to the beneficial ownership of our Class A Common Stock and Class B Common Stock (on a post reverse-split basis) as of March 31, 2021, for (i) each director and officer, (ii) all of our directors and officers as a group, and (iii) each person known to us to own beneficially five percent (5%) or more of the outstanding shares of our Class A Common Stock or Class B Common Stock. Unless otherwise specified below, the address of each of the persons listed in the table below is c/o Rocky Mountain Industrials, Inc., 4601 DTC Blvd., Suite 130, Denver, Colorado, 80237.

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To our knowledge, except as indicated in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to the shares of common stock indicated.

	Class of	Shares		Percentage
Name and Address of	Common	Beneficially		Beneficially
Beneficial Owner (1)	Stock (2)	Owned		Owned (3)
Directors and Executive Officers
Chad Brownstein, Chairman, Director	Class A	10,791,701	(5)​	30.16%
	Class B	531,176	(5)​	11.33%
Gregory Dangler, Vice Chairman, Director	Class A	9,499,657	(4)​	26.55%
	Class B	368,823	(4)​	7.87%
Adrian Fairbourn, Director	Class B	70,333		1.50%
Barry Munitz, Director	Class B	314,853	(7)​	6.72%
Brandon Pilot, Director	Class B	—		0.00%
Officers and Directors as a Group	Class A	20,291,358		56.70%
	Class B	1,560,870		33.30%
5% Shareholders
Legado Del Rey, LLC	Class A	15,494,500	(6)​	43.30%
Principio Management LLC	Class A	9,499,657	(4)​	26.55%
	Class B	368,823	(4)​	7.87%
77727111, LLC	Class A	10,791,701	(5)​	30.16%
	Class B	531,176	(5)​	11.33%
The Munitz Family Trust	Class B	306,853	(7)​	6.34%
Mitchell C. Milias	Class B	512,333		10.93%
Shares outstanding includes vested and unvested shares.

(1) Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of common stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be beneficially owned and outstanding for the purpose of computing the percentage ownership of any other person shown in the table.

(2) The Company has Class A Common Stock and 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, such as an approval of a plan of merger, exchange or conversion, an increase or decrease in the number of authorized shares of a class or series of stock in certain circumstances, and other situations as required by Nevada law where the rights, preferences or limitations of such holders are adversely impacted. On matters which the applicable class of stockholders have the right to vote, each Class A Common Stock and Class B Common Stock shall be entitled to one vote per share. The class A shares convert to class B shares on a 20:1 basis upon the finalization of the Company up-listing on an applicable stock exchange.

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(3) Based on 35,785,858 shares of Class A Common Stock and 4,687,332 shares of Class B Common Stock outstanding as of March 31, 2021.

(4) Mr. Gregory M. Dangler is the indirect owner of 9,499,657 shares of Class A Common Stock and 368,823 shares of Class B Common Stock, which are directly held by Principio Management LLC . The business address of Principio is 4601 DTC Blvd., Suite 130, Denver, CO 80237. The principal business of Principio is to provide management consulting services. Mr. Dangler is the managing member owner of Principio and has sole voting and dispositive power over the shares held by Principio. Principio and 77727111, LLC (see note (5) below) have agreed to vote together on all matters requiring the vote of shares of Class Common Stock pursuant to a voting agreement. Upon conversion of the Class A Common Stock held by Principio , it would be entitled to 474,983 shares of Class B Common Stock, on a post-reverse-split basis. The beneficial ownership of Mr. Dangler as shown in the “Directors and Officers” table above includes the shares owned by Principio as shown in the “5% Shareholders” table above.

(5) Mr. Chad Brownstein is the indirect owner of 10,791,701 shares of Class A Common Stock and 531,176 shares of Class B Common Stock, which are directly held by 77727111, LLC. The business address of 77727111, LLC is 9301 Wilshire Blvd, Suite 312, Beverly Hills, CA 90210. The principal business of 77727111, LLC is to provide management consulting services. Mr. Brownstein is the managing member of 77727111, LLC and has sole voting and dispositive power over the shares held by 77727111, LLC. Principio and 77727111, LLC have agreed to vote together on all matters requiring the vote of shares of Class Common Stock pursuant to a voting agreement. Upon conversion of the Class A Common Stock held by 77727111, LLC, it would be entitled to 539,585 shares of Class B Common Stock, on a post-reverse-split basis. The beneficial ownership of Mr. Brownstein as shown in the “Directors and Officers” table above includes the shares owned by 77727111, LLC as shown in the “5% Shareholders” table above.

(6) The business address of Legado Del Rey, LLC is 121 South Beverly Dr., Beverly Hills, CA 90212. The principal business of Legado Del Rey, LLC is to act as a family office. Edward Czuker is the manager of Legado Del Rey, LLC and has sole voting and dispositive power over the shares held by this entity.

(7) Barry Munitz is the trustee of The Munitz Family Trust and has sole voting and dispositive power over the shares held by this entity.

The Company is not aware of any arrangement, including any pledge by any person of the Company’s securities, the operation of which may at a subsequent date result in a change in control of the Company.

Securities Authorized for Issuance Under Equity Compensation Plans

On February 26, 2015, our Board of Directors and our stockholders approved and adopted the RMR Industrials Inc. 2015 Equity Incentive Plan (the “Plan”).

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The Plan permits us to grant a variety of forms of awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards, to allow us to adapt our incentive compensation program to meet our needs. The number of shares of our common stock that may be issued under the Plan to employees, directors and/or consultants in such awards is 2,404,354  shares as of March 31, 2021. Our Board of Directors currently serves as the administrator of the Plan. As of March 31, 2021 1,393,674 shares have been issued under the plan.

				Number of Securities
				Remaining Available for
	Number of Securities to be			Future Issuance under Equity
	Issued upon Exercise of	Weighted-Average Exercise		Compensation Plans
	Outstanding Options, Warrants	Price of Outstanding Options,		(excluding securities reflected
	and Rights	Warrants and Rights		in column (a))
Plan Category	(a)	(b)		(c)
Equity Compensation Plans Approved by Security Holders (Options)	200,000	$	6.34	—
Equity Compensation Plans Approved by Security Holders (Restricted Stock)	1,093,618		0.00
Equity Compensation Plans Not Approved by Security Holders	—		—	—
Total	1,293,618	$	6.34	1,256,940

Restricted Stock Awards

During the year ended March 31, 2021, the Company granted 568,456 shares of restricted stock under the 2015 Plan and 384,000 shares of restricted stock have been forfeited. The shares vest over a period between two and four- years from the grant date provided that the award recipient continues to be employed by us through each of those vesting dates.

Stock Options

The Company grants non-qualified 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 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. During the year ended March 31, 2021, the Company did not grant any stock options. As of March 31, 2021, 200,000 stock options remain outstanding and are fully vested.

Item 13.   Certain Relationships and Related Transactions, and Director Independence

Brownstein Hyatt Farber Schreck, LLP, whose Chairman of the Board, Norman Brownstein, is the father of our Chairman of the Board, provides services to the Company. Legal fees paid by the Company to Brownstein Hyatt Farber Schreck, LLP in the year ended March 31, 2021 and 2020 were $266,050 and $313,256, respectively.

Other than as set forth above, during the last two completed fiscal years, none of our current officers or directors have been involved in any material proceeding adverse to the Company or any transactions with the Company or any of its directors, executive officers, affiliates or associates that are required to be disclosed pursuant to the rules and regulations of the SEC.

Review, Approval or Ratification of Transactions with Related Persons

Although we have adopted a Code of Ethics, we also rely on our Board to review related party transactions on an ongoing basis to address conflicts of interest. Our Board reviews a transaction in light of the affiliation of the relevant director, officer or employee and such person’s immediate family. Transactions are presented to our Board for approval before they

34

are entered into or, if this is not possible, for ratification after the transaction has occurred. Our Board approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company.

Director Independence

During the fiscal year ended March 31, 2021, we had three independent directors on our board. We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by The New York Stock Exchange, Inc. and the Securities and Exchange Commission.

Subject to some exceptions, these standards generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee of ours; (b) a member of the director’s immediate family is, or in the past three years has been, an executive officer of ours; (c) the director or a member of the director’s immediate family has received more than $120,000 per year in direct compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity by our independent public accountants, or has worked for such firm in any capacity on our audit; (e) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves on the compensation committee; or (f) the director or a member of the director’s immediate family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the past three years, exceeds the greater of $1,000,000 or two percent of that other company’s consolidated gross revenues.

Item 14.   Principal Accounting Fees and Services

The following table sets forth all fees we incurred in connection with professional services rendered by our independent registered public accounting firm, BF Borgers CPA PC during the fiscal years ended March 31:

Fee Type	2021		2020
Audit Fees	$	52,400	$	95,040
Tax Fees		1,600		1,635
All Other Fees		—		—
	$	54,000	$	96,675

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PART IV

Item 15.   Exhibits Financial Statement Schedules

(a) Financial Statements and Financial Statement Schedule

See Index to Consolidated Financial Statements

(b) Exhibits:

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated February 27, 2015, between RMR Industrials, Inc., OLYB Acquisition Corporation and RMR IP, Inc. (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015)
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015)
3.2	Certificate of Change to Articles of Incorporation (incorporated by reference to our Current Report on Form 8-K filed on September 4, 2015).
3.3	Amended and Restated Bylaws (incorporated by reference to our Current Report on Form 8-K filed on February 27, 2015).
3.4	Terms and conditions of equity instruments (filed herewith)
10.1	Certification of Designations, Preferences and Rights of Series A Preferred Stock Dated April 15, 2021 (incorporated by reference to our Current Report on Form 10-K filed on April 30, 2021).
10.2	Consulting Agreement, dated October 15, 2014, between RMR IP, Inc. and Gregory Dangler (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015)
10.3	Consulting Agreement, dated October 15, 2014, between RMR IP, Inc. and Chad Brownstein (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015)
10.4	Consulting Agreement, dated October 15, 2014, between RMR IP, Inc. and Principio Management LLC (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015)
10.5	Consulting Agreement, dated October 15, 2014, between RMR IP, Inc. and 77727111, LLC (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015)
10.6	Employment Agreement dated 2-1-2020 Between Chad Brownstein and Rocky Mountain Industrials, Inc.
10.7	Voting Agreement, dated February 27, 2015, between Principio Management LLC and 77727111, LLC (incorporated by reference to our Amendment No. 2 to the Current Report on Form 8-K/A filed on May 8, 2015).
10.8	Assignment Agreement, dated October 15, 2014, between RMR Holdings, Inc. and RMR IP, Inc. (incorporated by reference to our Amendment No. 2 to the Current Report on Form 8-K/A filed on May 8, 2015).

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10.9	2015 Equity Incentive Plan (incorporated by reference to our Current Report on Form 8-K filed on February 27, 2015)
21.1	List of Subsidiaries (filed herewith)
31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (Filed herewith)
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (Filed herewith)
32.1	Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
32.2	Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
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 Label 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)

37

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Rocky Mountain Industrials, Inc.
Dated: December 15, 2021	By:	/s/ Brian Fallin
	Brian Fallin
	Chief Executive Officer
Dated: December 15, 2021	By:	/s/ Brian H. Aratani
	Brian H. Aratani
	Chief Financial Officer
	(Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this A report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated: December 15, 2021	By:	/s/ Brian Fallin
		Brian Fallin, Chief Executive Officer
Dated: December 15, 2021	By:	/s/ Chad Brownstein
		Chad Brownstein, Non-Executive Board Chairman
Dated: December 15, 2021	By:	/s/ Gregory Dangler
		Gregory Dangler, Executive Vice-Chairman
Dated: December 15, 2021	By:	/s/ Adrian Fairbourn
		Adrian Fairbourn, Director
Dated: December 15, 2021	By:	/s/ Barry Munitz
		Barry Munitz, Director
Dated: December 15, 2021	By:	/s/ Brandon Pilot
		Brandon Pilot, Director

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Item 8.      Financial Statements and Supplementary Data

ROCKY MOUNTAIN INDUSTRIALS, INC.

INDEX TO FINANCIAL STATEMENTS

March 31, 2021

	Page(s)
Report of Independent Registered Public Accounting Firm	40
Consolidated Balance Sheets as of March 31, 2021	41
Consolidated Statements of Operations for the year ended March 31, 2021 and 2020	42
Consolidated Statements of Stockholders’ Equity for the year ended March 31, 2021	43
Consolidated Statements of Cash Flows for the year ended March 31, 2021 and 2020	44
Notes to the Consolidated Financial Statements	45

39

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Rocky Mountain Industrials, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Rocky Mountain Industrials, Inc. as of March 31, 2021 and 2020, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/S/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company's auditor since 2018

Lakewood, CO

December 15, 2021

40

ROCKY MOUNTAIN INDUSTRIALS, INC.

CONSOLIDATED BALANCE SHEETS

	March 31,
	2021		2020
ASSETS
Current assets
Cash	$	1,621,822	$	57,240
Accounts receivable		71,555		80,180
Other receivable		3,404,010		—
Inventory		—		9,520
Prepaid expenses		588,340		388,953
Restricted cash		185,325		217,500
Assets held for sale		5,000		2,674,941
Total current assets		5,876,052		3,428,334
Property, plant and equipment, net		2,672,661		2,973,221
Land under development		6,929,630		6,800,616
Right of use asset		241,868		519,754
Asset retirement obligation		75,984		62,195
Other Intangibles, net		64,933		68,191
Deposits and other assets		111,178		56,785
Total assets	$	15,972,306	$	13,909,096
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	610,216	$	1,223,995
Accrued liabilities		647,180		1,064,633
Accrued liabilities, related party		1,311,250		1,210,000
Dividends payable		1,008,942		140,032
Debt due within one year		4,474,082		1,756,654
Liabilities held for sale		423,853		2,363,203
Total current liabilities		8,475,523		7,758,517
Debt due after one year		952,059		250,000
Preferred shares debt		—		200,001
Lease liability		241,868		519,754
Accrued reclamation liability		119,593		108,701
Total liabilities		9,789,043		8,836,973
Commitments and Contingencies (Note 12)
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 March 31, 2021 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 March 31, 2021 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 March 31, 2021 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 March 31, 2021 and March 31, 2020		35,786		35,786
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 4,687,332 and 4,840,919 shares issued and outstanding on March 31, 2021 and March 31, 2020, respectively		4,688		5,277
Additional paid-in capital		51,658,183		49,276,203
Accumulated deficit		(57,367,534)		(48,572,143)
Total stockholders’ equity		6,183,263		5,072,123
Total liabilities and stockholders’ equity	$	15,972,306	$	13,909,096

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

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ROCKY MOUNTAIN INDUSTRIALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years ended March 31,
	2021		2020
Revenue	$	680,225	$	1,084,113
Cost of goods sold		699,087		955,901
Gross profit (loss)		(18,862)		128,212
Selling, general and administrative (includes depreciation, depletion and amortization of $304,755 in 2021 and $523,762 in 2020)		12,132,761		11,856,820
Loss from operations		(12,151,623)		(11,728,608)
Gain on sale of assets		6,417,744		18,000
Interest income (expense), net		(799,072)		(257,701)
Loss before income tax provision		(6,532,951)		(11,968,309)
Income tax expense		—		861
Net loss from continuing operations		(6,532,951)		(11,967,448)
Loss from discontinued operations, net of tax		(1,393,530)		(584,936)
Net Loss	$	(7,926,481)	$	(12,552,384)
Basic and diluted loss per share from continuing operations	$	(1.02)	$	(2.27)
Basic and diluted loss per share from discontinued operations	$	(0.22)	$	(0.11)
Basic and diluted loss per share	$	(1.37)	$	(2.38)
Weighted average shares outstanding, basic and diluted		6,404,685		5,264,892

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

42

ROCKY MOUNTAIN INDUSTRIALS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

							Preferred Stock
	Common Stock Class A			Common Stock Class B			Series A-1				Series A-2				Series A-3				Additional		Accumulated			Noncontrolling
	Shares	Amount		Shares	Amount		Shares		Amount		Shares		Amount		Shares		Amount		Paid-In Capital		Deficit			Interest	Total
Balance, March 31, 2019	35,785,858	$	35,786	4,032,752	$	4,033		—	$	—		—	$	—		—	$	—	$	42,102,105	$	(35,428,938)	$	99,212	$	6,812,198
Equity conversion of RMRA to RMRI common stock	—		—	166,667		167		—		—		—		—		—		—		(167)		99,212		(99,212)		—
Forfeiture of common stock	—		—	(93,500)		(94)		—		—		—		—		—		—		94		—		—		—
Issuance of warrants for services	—		—	—		436		—		—		—		—		—		—		299,638		—		—		300,074
Issuance of preferred shares	—		—	—		—		43.27		4,327,000		—		—		—		—		—		(500,000)		—		3,777,000
Issuance of common stock for subscription	—		—	175,000		175		—		—		—		—		—		—		3,124,825		—		—		3,125,000
Issuance of common stock through services	—		—	12,000		12		—		—		—		—		—		—		(12)		—		—		—
Issuance of restricted common shares for compensation	—		—	524,000		524		—		—		—		—		—		—		(524)		—		—		—
Issuance of shares to Board members	—		—	24,000		24		—		—		—		—		—		—		(24)		—		—		—
Quarterly dividends on preferred shares	—		—	—		—		—		—		—		—		—		—		—		(140,033)		—		(140,033)
Stock-based compensation	—		—	—		—		—		—		—		—		—		—		3,750,268		—		—		3,750,268
Net loss	—		—	—		—		—		—		—		—		—		—		—		(12,552,384)		—		(12,552,384)
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	—		—	444,456		445		—		—		—		—		—		—		(444)		—		—		1
Issuance of Class B Common Shares upon exercise of warrants	—		—	60,000		61		—		—		—		—		—		—		749,939		—		—		750,000
Issuance of Class B common shares for services	—		—	40,300		40		—		—		—		—		—		—		1,007,460		—		—		1,007,500
Forfeiture of common stock	—		—	(384,000)		(385)		—		—		—		—		—		—		385		—		—		—
Issuance of restricted Class B Common Stock for Board compensation	—		—	24,000		24		—		—		—		—		—		—		(24)		—		—		—
Stock-based compensation	—		—	—		—		—		—		—		—		—		—		5,699,030		—		—		5,699,030
Quarterly dividends on Series A-1 and A-2 Preferred shares	—		—	—		—		—		—		—		—		—		—		—		(868,910)		—		(868,910)
Other	—		—	—		(436)		—		—		—		—		—		—		436		—		—		—
Net loss	—		—	—		—		—		—		—		—		—		—		—		(7,926,481)		—		(7,926,481)
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

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

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ROCKY MOUNTAIN INDUSTRIALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended March 31,
	2021		2020
Cash flow from Operating Activities:
Net loss	$	(7,926,481)	$	(12,552,384)
Adjustments to reconcile net loss to net cash used in operating activities
Operating cash flows from (used in) discontinued operations		2,625,152		(548,210)
Depreciation, depletion and amortization expense		304,755		523,762
Stock-based compensation		6,074,015		4,050,579
Gain on sale of assets		(6,417,744)		0
Amortization of debt discount		630,053		8,708
Accretion expense		10,892		(18,872)
Deferred rent		0		(39,898)
Changes in operating assets and liabilities:
Accounts receivable		8,625		22,690
Other receivable		(3,404,010)		0
Inventory		9,520		39,456
Prepaid expenses		(199,387)		(248,730)
Restricted cash		32,175		(105,806)
Deposits and other assets		(54,393)		9,057
Accounts payable		(613,779)		348,530
Accrued liabilities		215,047		2,177,264
Accrued liabilities, related parties		101,250		95,000
Payments on lease liability		0		519,754
Net cash used in operating activities		(8,604,310)		(5,719,100)
Cash Flows from Investing Activities:
Proceeds from lot sale		7,639,090		0
Investments in land under development		(1,333,784)		(2,015,996)
Purchase of property, plant and equipment		(38,279)		0
Acquisition of other intangibles		0		(35,899)
Net cash provided by (used in) investing activities		6,267,027		(2,051,895)
Cash Flows from Financing Activities:
Proceeds from note payable		5,160,370		567,856
Repayment of debt		(3,485,615)		(169,801)
Deferred financing cost		(22,890)		0
Proceeds from issuance of Class B common stock		750,000		3,124,763
Proceeds from issuance of Series A-1 Preferred shares		0		3,777,000
Proceeds from issuance of Series A-2 Preferred shares		1,500,000		0
Net cash provided by financing activities		3,901,865		7,299,818
Net increase (decrease) in cash		1,564,582		(471,177)
Cash at beginning of period		57,240		528,417
Cash at end of period	$	1,621,822	$	57,240
Restricted cash at beginning of period	$	217,500	$	111,964
Decrease in collateral requirement		(32,175)		131,436
Increase in surety bond		0		(25,900)
Restricted cash at end of period	$	185,325	$	217,500
Supplemental cash flow information:
Cash paid for interest	$	248,805	$	351,163
Cash paid for income taxes	$	0	$	0

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

44

ROCKY MOUNTAIN INDUSTRIALS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE FISCAL YEARS ENDED MARCH 31, 2021 and 2020

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

45

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. In July of 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

A summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the accompanying consolidated financial statements. These consolidated financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity.

Basis of Presentation and Consolidation

The accompanying consolidated financial statements for the fiscal year ended March 31, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for annual financial information in accordance with Securities and Exchange Commission (SEC) regulations. The 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.

Revenue Recognition

As of January 1, 2018, we adopted ASU NO. 2014-09, “Revenue from Contracts with Customers” (Topic 606). The Company recognizes revenues upon delivery of goods to the customer at which time the Company’s performance obligation is satisfied at an amount that the Company expects to be entitled to in exchange for those goods in accordance with the five step analysis outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied.

46

Revenue includes product sales of limestone, aggregate materials and other transportation charges to customers, net of discounts, allowances or taxes, as applicable.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. As of March 31, 2021, the Company views its operations and manages its business as 2 operating segments, Aggregates and Rail Park development.

Cash and Cash Equivalents

The Company considers all highly liquid securities with original maturities of three months or less at the date of purchase to be cash equivalents. As of March 31, 2021, the Company had cash of $1,621,822 and 0 cash equivalents. The Company may occasionally maintain cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation (“FDIC”). The amounts are held with major financial institutions and are monitored by management to mitigate credit risk.

Restricted Cash

As of March 31, 2021, the Company has $185,325 in restricted cash that is contractually obligated to be held on behalf of the Bureau of Land management to be held for the rehabilitation costs of the Mid-Continent Quarry and conclusion of the mining at this location.

Accounts Receivable

Accounts receivables are recorded at the invoiced amount and do not bear interest. The Company analyzes collectability based on historical payment patterns and macroeconomic factors which may affect the customers’ industry. Past due balances over 90 days based on payment terms are reviewed individually for collectability. The Company does not have any off-balance sheet credit exposure related to its customers. Concentration of credit risk is limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our most significant customers, using standard credit risk evaluation methods with reference to publicly available and customer supplied information, and monitor the amounts owed and take appropriate action when necessary. As a result, we believe that accounts receivable credit risk exposure is limited.

Inventory

Inventories are valued at the lower of cost or market. Cost is determined by the weighted average method.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Significant improvements are capitalized, while maintenance and repair expenses are charged to operations as incurred. The straight-line method of depreciation is used for substantially all of the assets for financial reporting purposes.

Depletion of acquired mineral properties is determined pursuant to a unit-of-extraction method which provides for depletion of such costs over the productive life of the mineral properties. The unit-of-extraction rate is determined by computing the production for the period as a percentage of total estimated and recoverable limestone as of that period. Significant judgement is involved in the determination of the estimate of total recoverable limestone in the unit-of-extraction method. Our internal engineering estimates of total estimated and recoverable limestone is a key component in determination of the unit-of-extraction rate. Our estimates of the recoverable limestone may change, possibly in the near term, resulting in changes to depletion rates in future periods. During the years ended March 31, 2021 and 2020, depletion of mineral properties was approximately $6,700 and $9,000, respectively.

47

We are considered an “exploration stage” company under the U.S. Securities and Exchange Commission (“SEC”) Industry Guide 7 as such the Company expenses any development costs as incurred.

Land Under Development

Land under development is recorded at cost. Significant improvements are capitalized. These costs relate to the ongoing development of the Rail Park.

Lease Obligations

On April 1, 2019, we adopted FASB ASU 2016-02, Leases: (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases.

For leases in which the Company is the lessee, the Company determined that the guidance has a material impact as the Company has 3 operating leases for office space. NaN of these leases have greater than 12 months remaining on the term of these leases at the date of the adoption of this guidance and as such the Company recorded a right of use asset and a lease liability of $491,111 at the date of adoption. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases.

Deposits

Deposits consist of a security deposit in connection with various office leases.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. Any impairment losses are measured and recorded based on discounted estimated future cash flows and are charged to income on the Company’s consolidated statements of operations. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates of future cash flows are based on numerous assumptions, including expected commodity prices, production levels, capital requirements and estimated salvage values. It is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable material, future commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties. As of March 31, 2021, the Company’s mineral resources do not meet the definition of proven or probable reserves or value beyond proven or probable reserves and any potential revenue has been excluded from the cash flow assumptions. Accordingly, recoverability of the long-lived assets’ capitalized cost is based primarily on estimated salvage values or alternative future uses.

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.

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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 $5,881,033 and $4,324,892 as of March 31, 2021 and March 31, 2020, respectively.

Net Loss per Common Share

Basic net loss per common share is calculated by dividing the net loss, after deducting preferred dividends, by the weighted average number of common shares outstanding during the period, without consideration of the potentially dilutive effects of converting stock options or restricted stock purchase rights outstanding. Diluted net loss per common share is calculated by dividing the net 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, diluted net loss per share is the same as basic net loss per share since dilutive common shares are not assumed to have been issued, as their effect is anti-dilutive.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases of the Company’s assets and liabilities and their financial statement reported amounts. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

A valuation allowance is recorded by the Company when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made.

Additionally, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Accordingly, the Company establishes reserves for uncertain tax positions. The Company has not recognized interest or penalties in its statement of operations and comprehensive loss since inception.

Non-controlling Interests

The Company’s non-controlling interests represented interests in RMR Aggregates, Inc. (“RMRA”) not owned by the Company. The Company evaluates whether non-controlling interests are subject to redemption features outside of its control. The amounts reported for non-controlling interests on the Company’s Consolidated Statements of Operations represent the portion of income or losses not attributable to the Company. On December 3, 2019, an accredited investor owning 5,263 shares of RMRA common stock elected to convert its common stock of RMRA into 166,667 shares of RMI Class B common stock, pursuant to an Equity Conversion Agreement between the accredited investor, RMRA and RMI. Upon conversion, RMRA became a wholly owned subsidiary of RMI.

49

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 and December of 2020, at a loss of approximately $898,000. Auction proceeds received was approximately $1,351,000 and was used to pay down debt.

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

	March 31,
	2021		2020
Cash	$	—	$	1,800
Accounts Receivable		—		45,287
Fixed Assets		—		2,384,877
Goodwill		—		237,977
Other noncurrent assets		5,000		5,000
Total assets held for sale	$	5,000	$	2,674,941
Accounts payable and accrued liabilities	$	23,853	$	75,634
Debt		400,000		2,287,569
Total liabilities held for sale	$	423,853	$	2,363,203

Major line items comprising net loss from discontinued operations are comprised of the following:

		Years Ended March 31,
		2021		2020
Revenue	$	122,665	$	1,006,679
Cost of goods sold		(199,004)		(922,255)
		(76,339)		84,424
Loss on Sales of Fixed Assets		(887,670)		(78,176)
Selling, general and administrative (including depreciation and amortization)		(371,044)		(480,673)
Interest expense, net		(58,477)		(110,511)
Net loss from discontinued operations	$	(1,393,530)	$	(584,936)

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company may use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

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In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in ASU 2016-13 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for “smaller reporting companies” (as defined by the Securities and Exchange Commission) for fiscal years beginning after December 15, 2022, including interim periods within those years, and must be adopted under a modified retrospective method approach. Entities may adopt ASU 2016-13 earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company’s financial statements and disclosures and does not believe this standard will have a material impact on the Company’s financial statements and disclosures.

In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses” (“ASU 2019-11”). In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief.” In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses.” These updates provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost and provide additional clarification and implementation guidance on certain aspects of the previously issued ASU 2016-13 and have the same effective date and transition requirements as ASU 2016-13. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the date of adoption. ASU 2016-13 is effective for the Company for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the effects the adoption of ASU 2019-11 will have on its consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The amendments in ASU 2019-12 simplify various aspects related to accounting for income taxes by removing certain exceptions contained in Topic 740 and also clarifies and amends existing guidance in Topic 740 to improve consistent application. ASU 2019-12 is effective for public business entities beginning after December 15, 2020, including interim periods within those years, and early adoption is permitted. The Company adopted the ASU on April, 1, 2020. Adoption of the standards is not expected to have a material impact on the Company’s Consolidated Balance Sheet, Statements of Operation, and Statements of Cash Flows.

3. INVENTORY

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

		March 31,
		2020
Blasted Rock	$	2,316
Packaging		7,204
Total	$	9,520

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4. PROPERTY, PLANT AND EQUIPMENT

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

	March 31,
	2021		2020
Recoverable Limestone	$	1,477,469	$	1,477,470
Mill Equipment		1,229,988		1,273,395
Mining Equipment		336,934		336,934
Mobile Equipment		844,664		813,975
Other		78,973		78,972
Total Fixed Assets		3,968,028		3,980,746
Less: Accumulated Depreciation		(1,295,367)		(1,007,525)
Property, plant and equipment, net	$	2,672,661	$	2,973,221

	Years	Depreciation rate
Mill Equipment	3 – 15	6.7% - 33.3	%
Mining Equipment	2 – 15	6.7% - 50.0	%
Mobile Equipment	5 – 12	8.3% - 20.0	%
Office Equipment	2 – 3	33.3% - 50.0	%

5. NOTES PAYABLE

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 $2,500,000. 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.

On March 5, 2021, Rail Land Company refinanced the Secured Promissory Note and executed a note that provides for a total credit facility of $12,189,000. The refinanced Secured Promissory Note remains secured by underlying property of the Rail Park and RMI remains a guarantor. The maturity date of the refinanced Secured Promissory Note is March 5, 2022, and accrues interest at 12% per annum. The terms of the refinanced Secured Promissory Note provides for a mandatory principal reduction in the event of a sale or lease of any lot that is part of the Rail Park. Such mandatory repayment equals 50% of net sales price of any lot sold or, 50% of any net lease payments received for any lot leased. The refinanced Secured Promissory Note provides for a release fee wherein, in addition to mandatory principal reduction upon the sale of lots, a release fee equal to 5% of gross proceeds from the sale of lots, or 10% of gross annual lease payment for lots leased, will be payable, up to a maximum of $2,250,000, in exchange for the private lender releasing the lien on the respective sold or leased lot. The refinanced Secured Promissory Note provides for the option to extend the maturity date of the refinanced Secured Promissory Note for up to twelve months in exchange for a $121,890 payment. In addition to the payment, the release fee maximum amount will increase by $250,000 if the option to extend the maturity is exercised. A $450,000 release fee payment was made in the quarter ended March, 31, 2021, as a result of a lot sale. Consequently, the maximum release fee payment amount has been reduced to $1,800,000 as of March 31, 2021.

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.

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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 December 2020, the same investor executed an unsecured note with the Company in the amount of $400,000. The note is carried net of original issue discount (3.75%) and was repaid in January 2021.  

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 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 June 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 of 2022 and will recognize a gain on extinguishment of debt (other income) in the amount of $438,500 in the Consolidated Statements of Operations in the respective quarter.

On April 26, 2019 RMR Logistics entered into an asset purchase agreement with H2K, LLC, a Colorado Limited liability company (“the seller”). Pursuant to the agreement which RMR Logistics acquired the sellers trucking assets. As a result of this acquisition RMR Logistics entered into a Term loan for $1,800,000. The loan matures on April 26, 2026 and accrues interest of 5.64% and is classified under long term liabilities, note payable, net of discount. Subsequent to the date of this filing, certain assets acquired in the sale were sold and used to pay down the term loan.

On April 4, 2019 RMI entered into a Senior Unsecured Promissory Note with Bienville Capital Partners, LP, a New York based investment firm for $1,000,000. The note accrued to $1,250,000 at maturity on April 4, 2020. Subsequent to the date of this filing, the note was paid off with proceeds from an issuance of preferred stock.

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	March 31,				Effective
	2021		2020		Interest Rate	Maturity Date
Equipment Loan	$	122,248	$	191,530	2.10% - 6.30%	August 25, 2021 - January 22, 2023
Secured promissory note		3,582,183		—	12.00%	March 5, 2022
Senior unsecured note		—		1,247,268	25.00%	April 4, 2020
Term loan		—		1,297,014	4.52%	July 21, 2020
Unsecured notes		1,250,424		967,856	10.00%	April 3, 2021 - June 30, 2021
Promissory notes		337,678		—	1.09%	January 1, 2025
Lines of credit		—		621,224	5.750%	May 6, 2020
Promissory notes (PPP loan)		438,500		—	1.00%	April 20, 2022
Secured disaster loan (SBA)		150,000		—	3.75%	September 9, 2050
		5,881,033		4,324,892
Unamortized debt issuance cost		(54,892)		(30,669)
		5,826,141		4,294,223
Discontinued operations		(400,000)		(2,287,569)
Less: current portion		(4,474,082)		(1,756,654)
Debt due after one year	$	952,059	$	250,000

6. TRANSACTIONS WITH RELATED PARTIES

On October 15, 2014, RMR IP (now known as RMR Logistics, Inc. (RMRL)), the Company’s subsidiary, entered into consulting agreements with each of Gregory Dangler, who is our current President, and Chad Brownstein, who is our current Chief Executive Officer, pursuant to which each of Mr. Dangler and Brownstein would provide services related to their roles as executive officers of the Company. The Company has accrued $1,311,250 for unpaid officers’ compensation expense in accordance with such consulting agreements through March 31, 2021. 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.

On October 15, 2014, RMRL entered into consulting agreements with each of Principio Management LLC, which holds 9,499,657 shares of Class A Common Stock of the Company (26.55%), and 77727111, LLC, is the owner of 10,791,701 shares of Class A Common Stock of the Company (30.16%), relating to advisory services provided by each of these entities. Mr. Dangler is the sole owner of Principio Management LLC and Mr. Brownstein is the sole owner of 77727111, LLC.

On January 31, 2020 the consulting agreement October 15, 2014 between Chad Brownstein and the Company was terminated. On January 31, 2020 the board resolved to pay Chad Brownstein monthly compensation of $35,000 a month for his services as Non-Executive Board Chairman.

On January 31, 2020 the Company entered into an employment agreement with Chad Brownstein for his Non-Executive services provided to the Company. The employment contract may be terminated at any time.

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 Preferred Stock, designated 19.45 as Series A-2 Convertible Preferred Stock, and designated 50.75 as Series A-3

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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, 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 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. At March 31, 2021 and March 31, 2020, the Company had 35,785,858 and 4,687,332 shares issued and outstanding, and 35,785,858 and 4,840,919 shares issued and outstanding of Class A Common Stock and Class B Common Stock, respectively.

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 March 31, 2021, there were 1,010,680 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 Stock Option Activity

				Weighted
		Grant Date		Average
		Weighted		Remaining	Aggregate
	Stock	Average		Contractual	Intrinsic
	Options	Exercise Price		Life (in Years)	Value (1)
Outstanding at April 1, 2020	200,000	$	6.34	8.9	$	—
Granted	0
Exercised	0
Forfeited	0
Expired	0
Outstanding at March 31, 2021	200,000	$	6.34	8.9	$	0
Vested and expected to vest March 31, 2021	0
Exercisable at March 31, 2021	200,000	$	6.34	8.9	$	0

Stock Awards

On February 26, 2015, our Board of Directors and our stockholders approved and adopted the “2015 Plan”.

The Plan permits us to grant a variety of forms of awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards, to allow us to adapt our incentive compensation program to meet our needs. The number of shares of our common stock that may be issued under the 2015 Plan to employees, directors and/or consultants in such awards is 2,404,354 shares as of March 31, 2021. Our Board of Directors currently serves as the administrator of the 2015 Plan. As of March 31, 2021, 1,393,674 shares have been issued under the 2015 Plan.

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During the year ended March 31, 2021 the Company granted 508,756 restricted shares of Class B Common Stock, with an aggregate grant date fair value of approximately $12.7 million, to employees, directors and contractors. The restricted shares vest ratably over a three or four-year vesting period, subject to continued service. During the year ended March 31, 2021, 384,000 restricted shares of common stock were forfeited by employees.

9. INCOME TAXES

There is 0 provision for income taxes because the Company has incurred operating losses since inception and has a full valuation allowance on its deferred tax asset. As of March 31, 2021 and 2020, the Company has concluded that it is more likely than not that the Company may not realize the benefit of its deferred tax assets due to losses generated and uncertainties surrounding its ability to generate future taxable income. Accordingly, the net deferred tax assets have been fully reserved.

Net deferred tax assets consist of the following components:

	March 31,
		2021		2020
Deferred tax asset:
Net operating loss carryforwards	$	19,599,269	$	17,509,131
Stock compensation		1,559,685		2,105,587
Fixed assets		75,941		639,918
Intangible assets		24,119		115,350
Accrued liabilities		(35,520)		(896,782)
State taxes - current		5,320		5,018
Other		1,959		26,082
Deferred tax liabilities:		—
State taxes - deferred		(214,625)		(214,625)
Valuation allowance		(21,016,148)		(19,289,679)
Net deferred tax asset	$	0	$	0

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income statutory tax rates to pretax loss from continuing operations as follows:

	March 31, 2021
Tax computed at federal statutory rate	$	(1,590,249)
State tax, net of federal tax benefit		(143,940)
Debt issuance cost amortization		7,510
Other		210
Change in valuation allowance		1,726,469
Net provision for income taxes	$	—

The Company has accumulated federal net operating loss carryovers of approximately $43.7 million and state accumulated net operating loss carryover of approximately $43.3 million as of March 31, 2021, which are available to reduce future taxable income. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes may be subject to annual limitations. A change in ownership may limit the utilization of the net operating loss carry forwards in future years. The federal and state tax loss carryforwards begin to expire in 2033.

10. SEGMENT REPORTING

For the twelve months ended March 31, 2021, the Company has 2 reportable segments: Aggregates and Rail Park. The Company had 3 reportable segments for the twelve months ended March 31, 2020: Aggregates, Logistics and Rail

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Park. The Aggregates segment produces chemical grade lime for use in the aggregates market. The Logistics segment was shut down 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 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 in the first half of calendar year 2021.

The Aggregates segment has a major customer, a mining operation (“Mine”), that accounted for approximately 84% of Aggregates segment revenue for the year ended March 31, 2021. As of March 31, 2021, the Mine accounted for approximately 43%; and, a construction company accounted for approximately 36% of Aggregate segment accounts receivable 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.

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.

		Year ended March 31, 2021
		Aggregates		Rail Park		Other/Corporate		Total
Revenue	$	680,225	$	—	$	—	$	680,225
Gross profit		(18,862)		—		—		(18,862)
Selling, general and administrative		1,458,313		—		10,674,448		12,132,761
Property, plant and equipment		2,628,983		—		43,678		2,672,661
Land under development		—		6,916,724		12,906		6,929,630

The March 31, 2020 segment information has not been retroactively adjusted to reflect the impact of discontinued operations.

		Year ended March 31, 2020
		Aggregates		Logistics		Rail Park		Other		Total
Revenues from external customers	$	1,077,665	$	1,392,200	$	—	$	—	$	2,469,865
Intersegment revenues		(379,074)		379,074		—		—		—
Interest revenue		1,202		—		—		79		1,202
Interest expense		5,089		115,305		—		249,099		369,493
Depreciation, depletion and amortization		293,076		339,811		—		3,228		636,115
Segment loss		1,587,055		859,497		28,316		10,073,082		12,547,950
Segment assets		3,820,728		2,800,238		6,787,710		11,705		13,420,381

11. COMMITMENTS AND CONTINGENCIES

The Company has certain non-cancelable operating leases for office locations that are accounted for as liabilities under FASB ASU 2016-02, Leases: (Topic 842). Upon adoption on April 1, 2019 the Company determined that the guidance has a material impact as the Company has 3 operating leases for office space. NaN of these leases have greater than 12 months remaining on the term of these leases at the date of the adoption of this guidance and as such the Company

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recorded a right of use asset and a lease liability of $491,111 at the date of adoption. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases.

Future minimum lease commitments under these non-cancelable operating leases at March 31, 2021, are as follows:

	Lease Commitment
2022	$	241,868
Thereafter		—
Total minimum lease payments	$	241,868

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 March 31, 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.

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
Liabilities incurred		—
Accretion expense		10,892
Balance at March 31, 2021	$	119,593

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.

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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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