ROCKY MOUNTAIN INDUSTRIALS, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

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

Overview

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

We have been incorporated into the state of nevada to August 6, 2012under the name “Online Yearbook” with the main business objective of developing and marketing online yearbooks for schools, businesses and government agencies.

At November 17, 2014, Rocky Mountain Resource Holdings, Inc. (“RMRH”) became our majority shareholder by acquiring 5,200,000 shares of our common stock (the “Shares”), representing 69.06% of the issued and outstanding shares of our common stock, pursuant to share purchase agreements actions with MM. El Maraana and Salah Blal, our former officers and administrators. The shares were acquired for a total purchase price of $357,670.

At December 8, 2014our name has been changed from Rocky Mountain Resource Holdings, Inc. at “RMR Industrials, Inc.” At January 1, 2020we changed our name from RMR Industrials, Inc.at “Rocky Mountain Industrials, Inc.“

At February 27, 2015 (the “Closing Date”), we have entered into and completed a merger transaction pursuant to an agreement and plan of merger (the “Merger Agreement”) by and between the company, Acquisition company OLYBa Nevada
company and wholly-owned subsidiary of the Company (“Merger Sub”), and RMRIP, Inc.a Nevada company (“PI RMR”). Pursuant to the terms of the 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 involved entities under the common control of MM. Brownstein and Dangler.

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

At October 12, 2016under an asset purchase agreement with CalX Minerals, LLCa Colorado limited liability company (“CalX”), we have completed the purchase of substantially all of the assets associated with the Mid-Continent Limestone Quarry on 41 unpatented placer mining claims from BLM in Garfield County, Colorado. CalX assets include mining claims, improvements, access rights, water rights, equipment, inventory, contracts, permits, certain intellectual property rights and other tangible and intangible assets associated with limestone mining.

While January 2018the Company has established Rail Land Company, LLC (“Terrestrial Railway Company“) as a wholly owned subsidiary of the Company to acquire and develop rail terminal and service facilities (“Railway fleet“). Rail Land Company purchased 620 acres of real estate located in Bennett, Colorado. The Company’s development of Railway fleet is intended to expand the company’s customer base for our products by utilizing rail freight capabilities to reach customers in the largest denver and expanding our business to include rail transportation solutions and services.

At April 26, 2019RMR Logistics entered into an asset purchase agreement with
H2K, LLCa Colorado LLC (“the Seller”) pursuant to which RMR Logistics acquired the trucking assets of the Seller. In April 2020the company

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Contents

began shutting down almost all of RMR Logistics’ operations with the closure of its Wellington, Colorado location and disposal of its operational assets through auctions.

Operating results

Comparison of the three and nine month periods ended December 31, 2021 and December 31, 2020

Revenue

Our revenues for the three and nine month periods ended December 31, 2021
were $1,416,888 and $2,198,682, respectively. This compares to revenue for the same period ended December 31, 2020 of $116,080 and $559,341. The increase in revenue for the three and nine month periods ended December 31, 2021is the result of the supply of construction materials for a warehouse construction project that began in November 2021 and was largely completed in January 2022.

Cost of Goods Sold

Our cost of goods sold for the three-month and nine-month periods ended December 31, 2021 were $1,103,766 and $1,759,619, respectively. This compares to the cost of goods sold for the same periods ended December 31, 2020 of $191,101 and
$534,769. The increase in cost of goods sold for the three-month and nine-month periods ended December 31, 2021 is the result of increased revenue related to the supply of construction materials for the warehouse construction project mentioned above.

Functionnary costs

Our operating expenses for the three-month and nine-month periods ended December 31, 2021 were $2,818,954 and $8,742,602. This compares to operating expenses for the same closed periods December 31, 2020 of $3,198,492 and $9,164,097. Operating expenses included overhead related to mining operations, related party advisory services, public company costs, wages and salaries, and depreciation and amortization.

Interest expense, net

Our interest expense, net for the three-month and nine-month periods ended
December 31, 2021 were $170,958 and $490,475compared to $217,369 and $551,170
interest expense for the same period ended December 31, 2020.

Net profit (net loss)

Our net loss for the three and nine month periods ended December 31, 2021
has been $2,676,790 and $3,157,223. This compares to a net loss for the same periods ended December 31, 2020 of $3,562,846 and $11,072,154.

Cash and capital resources

From December 31, 2021we had current assets of $7,952,195total current liabilities of $9,076,401 and insufficient working capital of $1,124,206. We suffered a cumulative loss of $61,239,130 since its creation.

In past years, the Company has financed its operations using cash proceeds received from the issuance of common and preferred shares and proceeds from debt financing. However, several significant transactions have taken place over the last 12 months which have had a positive impact on the Company’s net financial position and have strengthened its financial position and its ability to meet its future obligations over the next 12 months. without the need to raise additional funds as it has traditionally been required to do so. These include:

Rail Park FDP and Final Plat were unanimously approved by the Adams County

1. Board of County Commissioners to September 1, 2020paving the way for many

    sales and construction.


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At January 14, 2021the company sold 83 acres of land to a Fortune 500 company

for a gross selling price of $9.1M. This purchase was the first of twelve

2. batches available in the Railway fleet. Lot sales will be a main source of cash

    inflows for the Company with significant interest from many potential light
    and heavy industrial tenants.


    The RMRP Metro District bond offering closed on April 15, 2021, raising total
    proceeds of approximately $65.2M.  These bond proceeds will fund the public

3. the infrastructure costs of the Railway fleet. Total rail fleet the cost of the project was

    budgeted at between $60M and $75M of which approximately 75% is considered
    public infrastructure and therefore not an obligation of the Company. The
    Company is responsible for the remaining approximately 25%.


    Construction on the south parcels of the Rail Park (approximately 150 acres)

4. started in April 2021. The Company has set up a construction credit facility for

    $12M to fund it portion of construction costs (i.e., those not funded with
    Metro District bond proceeds).


    To date the Company has received approximately $2M as reimbursement of

5. “pre-construction” costs that were incurred prior to the closing of the Bond

Offering in April.

6. In September 2021the Company sold its underlying water rights Railway fleet,

to the Metro district during about $5.9M.

Recently issued accounting pronouncements

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

Off-balance sheet arrangements

We have no off-balance sheet arrangements.

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