SEC filings crucial to considering RMI’s future in the community

By Kathryn Trauger

We are missing something massive regarding Rocky Mountain Industrials, Inc. (RMI was previously known as Rocky Mountain Resources, or RMR, until an official name change in January).

The focus is on the technical and environmental issues’ impact to Glenwood Springs and the region. However, other components of RMI have been ignored. This is a critical omission. If the Bureau of Land Management (BLM) or other regulatory bodies ignore this in their decision-making process, the consequences are enormous.

What are the issues? The main issues are financial viability, regulatory compliance, the internal structure of RMI, the background of the executive team and board of directors, and the history of the company.

The importance? Every promise, every assurance, made by RMI is worthless, unless RMI, its management and its board of directors have a demonstrated history of honesty, integrity and respect for regulations. Promises are meaningless unless they have the expertise, intention and financial ability to carry out those promises.

Because RMI is a publicly traded company, it must follow stringent regulations. Foremost is the filing of a 10-K report with the Securities Exchange Commission (SEC). All RMI reports are available on the SEC website, The information presented is from this website, mostly from RMI’s Form 10- K. It is verifiable.


Form 10-K is an annual requirement after the end of the fiscal year. RMI’s fiscal year ends March 31, therefore Form 10-K is due by June 30. For years, RMI has not met this deadline: 2017 was filed Nov. 29, 2017; 2018 was filed Oct. 3, 2018, and 2019 was filed Jan. 3, 2020, over six months late.

Numerous Late Filing Notifications were submitted to the SEC stating, “Information necessary for the filing of a complete and accurate Form 10-K could not be gathered within the prescribed time period without unreasonable effort and expense due to limited accounting personnel.” This is also noted in Form 10-K as a material weakness.

It appears that RMI made little effort to comply with federal regulations.

Going Concern

Financial viability is key. In the 2019 10-K filing, within Liquidity and Capital Reserves, RMI states, “Our independent auditors have issued an audit opinion for our financial statements for the year ended March 31, 2019, which includes a statement expressing substantial doubt as to our ability to continue as a going concern due to our limited liquidity and our lack of revenues.” This is serious! Such opinions are not given lightly. The auditors have serious concern whether RMI will continue in business for another year

The report states, “We will require additional funds to achieve and maintain compliance with SEC reporting obligations and to remain in good standing with the state of Nevada. There are no assurances that we will be able to raise the required working capital on favorable terms, in a timely manner or at all. … In addition, we cannot be assured of profitability in the future.”

If RMI fails, there will be little chance of reclamation of damage done. RMI appears to be financially unstable.

Material Weakness in Internal Controls

Public companies are required to maintain a system of internal controls to ensure that a company can meet its reporting obligations on time, and the information is accurate and appropriate.

In section 9A – Material Weakness – RMI states, “Our principal executive officer and principal financial officer concluded that as of March 31, 2019, 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.”

Elsewhere in the report, RMI discloses payment to the CEO’s father’s law firm of almost a half a million dollars. Yet, RMI could not maintain the personnel required to meet its reporting obligations?

This wording appears in their 10-K report for 2018 and 2017. RMI had no incentive to correct a very significant problem.

Lack of Expertise

The SEC requested additional information and clarification from RMI for their 2018 10-K filing. The SEC stated the wording in their report was misleading, suggesting that RMI was preparing for or currently in mineral production.

The SEC maintained that RMI is in exploration and required to describe their business activities as “exploration state activities until your company has reserves as defined in Industry Guide 7.”

RMI responded by saying the disclosure would be in the 2019 Filing. The SEC responded that they needed draft disclosures of the proposed changes. It seems the executive team was unfamiliar with Industry Guide 7 or the appropriate mining related accounting practices. This speaks to the lack of experience and expertise by the executive team.

Several times RMI responded, “Given the breadth and detail of information needed to provide responses, the information cannot be gathered within the time period prior to filing this letter without unreasonable effort and expense.”

Based on the compensation reported for their executive team and others, it seems that the information could have been provided. RMI’s response speaks to a pattern of disregard for compliance and an unwillingness to be forthright it its disclosures.

The SEC completed their review with this caveat, “We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures . . .”

People are the most important factor in business. Honesty and integrity are key. Are they forthcoming in their business dealings? I will look at the people and the history of RMI next time.

Information in the SEC filing indicates ongoing incompetence and a willful disregard for Federal regulations. The BLM and other regulatory bodies owe it to the citizens of Glenwood Springs to consider all relevant information when making their decision.

Editor’s note: This column first appeared in the Glenwood Springs Post Independent on March 2, 2020.

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