10-Q 1 rmmi_10q-013109.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: January 31, 2009 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: 0-9060 ROCKY MOUNTAIN MINERALS, INC. ----------------------------- (Exact name of registrant as specified in its charter) Wyoming 83-0221102 ------- ---------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation of organization) 2480 North Tolemac Way, Prescott, Arizona 86305 ----------------------------------------------- (Address of principal executive offices) (Zip Code) (928) 778 1450 -------------- (Registrant's telephone number, including area code) N/A --- (Former name, former address and formal fiscal year, if changes since last report) 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 [X] No [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [_] Smaller reporting company [X] (Do not check if smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 117,176,139 shares of common stock, $0.001 par value, as of March 12, 2009. FORM 10-Q For the Quarter Ended January 31, 2009 Table of Contents Part I. FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Balance Sheets, January 31, 2009 (unaudited) and October 31, 2008 (audited) Consolidated Statement of Operations for the three months ended January 31, 2009 and 2008, and cumulative since inception (unaudited) Consolidated Statement of Cash Flows for the three months ended January 31, 2009 and 2008, and cumulative since inception (unaudited) Notes to Consolidated Financial Statements (unaudited) Item 2. Management's Discussion and Analysis and Results of Operations. Item 4T. Controls and Procedures. Part II. OTHER INFORMATION Item 6. Exhibits. Signatures PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements. ROCKY MOUNTAIN MINERALS, INC. (An Exploration Stage Enterprise) CONSOLIDATED BALANCE SHEETS October 31, 2008 and January 31, 2009 ASSETS (Amounts in thousands, except per share data) October 31, January 31, 2008 2009 (Audited) (Unaudited) ASSETS ---------- ---------- Current Assets: Cash $ 5 $ 25 Prepaid items -- -- ---------- ---------- Total current assets $ 5 $ 25 Assets held for sale-net (Note 2) 150 150 Deferred offering costs 68 68 ---------- ---------- TOTAL ASSETS $ 223 $ 243 ========== ========== See accompanying notes. 2 ROCKY MOUNTAIN MINERALS, INC. (An Exploration Stage Enterprise) CONSOLIDATED BALANCE SHEETS October 31, 2008 and January 31, 2009 LIABILITIES AND STOCKHOLDERS' EQUITY (Amounts in thousands, except per share data) October 31, January 31, 2008 2009 (Audited) (Unaudited) ---------- ---------- Current liabilities: Accounts payable $ 35 $ 47 Accrued expenses 1 - Accrued Interest-related party (Note 4) 43 45 Note Payable - related party (Note 4) 384 316 ---------- ---------- Total current liabilities 463 408 Stockholders' equity (deficit): Preferred Stock; $.05 par value, $.015 cumulative dividends, convertible; 44,000,000 shares authorized, 44,000,000 shares issued and outstanding 2,200 2,200 Common Stock; $.001 par value, 250,000,000 shares authorized, 102,176,139 (2008) 117,176,139 (2009) shares issued and outstanding 102 117 Capital in excess of par value 4,027 4,109 Deficit accumulated during the exploration stage (6,569) (6,591) ---------- ---------- Total stockholder's equity (deficit) (240) (165) ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (deficit) $ 223 $ 243 ========== ========== See accompanying notes. 3

*Less than $0.01 per share. See accompanying notes. 4

See accompanying notes. 5 ROCKY MOUNTAIN MINERALS, INC. (An Exploration Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this report. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the financial statements reflect all adjustments considered necessary for a fair presentation. The results of operations for the three months ended January 31, 2009 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2008 as filed with the Securities and Exchange Commission (the "SEC"). 1. Organization and summary of significant accounting policies Organization: Rocky Mountain Minerals, Inc. (the "Company") was incorporated on February 21, 1974, and began operations on May 19, 1978 (inception) and is considered to be a mining company in the exploratory stage and a development stage company as defined by SFAS No. 7, and since inception, has been engaged in the acquisition of mineral interests, oil and gas properties and leases, financing activities, and initiated milling of the Company's mine tailings in 1983. During the year ended October 31, 1982, the Company disposed of the majority of its then oil and gas properties. In January 1984, the Company discontinued milling. Subsequent to October 31, 1991, the Company was inactive and had limited receipts and expenditures until 2003 when the Company issued stock for an investment in a joint venture. Basis of presentation: The financial statements have been prepared on a going concern basis which contemplates the realization of assets and liquidation of liabilities in the ordinary course of business. As shown in the accompanying financial statements, the Company has incurred significant losses and at January 31, 2009 had minimal cash. As a exploration stage company, the Company relies on infusions of cash through the sale of assets held for sale, the performance of its investment in joint venture and the issuance of equity capital. As a result, substantial doubt exists about the Company's ability to continue to fund future operations using its existing resources. To meet the Company's working capital requirements, the Company or, if the such financing is undertaken following the Merger (as described below and elsewhere in this Quarterly Report), New Rocky, may seek to undertake a capital raising from a variety of sources, or a partial or complete sale of our exploration interest or interests. Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Significant items subject to such estimates and assumptions include the carrying value of assets held for sale and long-lived assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. 6 Principles of Consolidation: The Consolidated Financial Statements include the accounts of Rocky Mountain Minerals, Inc. and its subsidiary, RMMI Australia Pty Ltd. All significant intercompany balances and transactions have been eliminated. The functional currency for the majority of the Company's operations, including the Australian operations, is the U.S. dollar. Depreciation, depletion and amortization: Depreciation was provided by the Company on the straight-line and declining balance methods. Depletion of developed mineral interests (mine dumps and tailings) was computed by the unit-of-production method based on estimated recoverable quantities of gold and silver. Undeveloped mineral interests and oil and gas properties: The Company utilized the "successful efforts" method of accounting for undeveloped mineral interests and oil and gas properties. Capitalized costs were charged to operations at the time the Company determined that no economic reserves existed. Costs of sampling and retaining undeveloped properties were charged to expense when incurred. Mineral exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, costs incurred prospectively to develop the property are capitalized as incurred and are amortized using the units of production method over the estimated life of the ore body based on estimated recoverable ounces or pounds in proven and probable reserves. Proceeds from the sale of undeveloped properties were treated as a recovery of cost. Proceeds in excess of the capitalized cost realized in the sale of any such properties, if any, were to be recognized as gain to the extent of the excess. Income taxes: The Company provides for income taxes utilizing the liability approach under which deferred income taxes are provided based upon enacted tax laws and rates applicable to the periods in which the taxes became payable. Cash equivalents: For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Impairment of long-lived assets: The Company evaluates the potential impairment of long-lived assets in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The Company annually reviews the amount of recorded long-lived assets for impairment. If the carrying amount of a long-lived asset is not recoverable from its undiscounted cash flows, the Company will recognize an impairment loss in such period. Concentrations of credit risk: Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality financial institutions. 7 2. Purchase of Rochester mining properties In October 1980, the Company entered into an agreement with certain individuals, including officers and directors of the Company, whereby the Company sold each of them a certain number of shares of its common stock (1,400,000 in the aggregate); a percentage of the net profits, if any, on an accumulated basis (10.5% in the aggregate) from the operations of the mill being acquired from Rochester; and a perpetual non-participating royalty interest in the patented mining claims being acquired from Rochester (10.5% aggregate). The Company valued the shares issued under the agreements at $.28225 per share that represented approximately 60% of the quoted market "bid" price on October 28, 1980. The balance of the amount received from the "private placement" ($348,400) was deferred until closing of the agreement with Rochester, at which time, the amount deferred was credited to the total purchase price of the properties. On November 30, 1981, the Company closed the agreement with Rochester Enterprises, a Montana limited partnership, acquiring 11 patented lode mining claims, certain improvements, buildings and machinery, and certain mill tailings and mine dumps located in Montana for a purchase price totalling $3,029,765 and 2,530,000 shares of the Company's common stock. Pursuant to the agreement, the Company agreed, on a one-time basis only, to prepare and file a registration statement under the Securities Act of 1933, as amended, or a notification of exemption pursuant to Regulation A, if available, from such act at its expense to sell or otherwise dispose of any of the shares issued to Rochester under the agreement, upon the request of any one or more of the partners of Rochester. During 1987 and 1988, the Company repurchased 7.125% (aggregate) of both of the net profits and royalty interests for a total of $47,500 in cash and the issuance of 2,425,000 shares of its common stock ($.01 per share). During 1997, the Company decided to sell its remaining undeveloped mineral interests at Rochester Montana including the mine dumps and tailings. The assets have been reclassified to net assets held for sale and stated at their net realizable value resulting in a loss of $1,749,000. During 2002 and 2003 the Company sold all its interest in thirteen patented claims, together with the dump and tailings material and equipment, that it purchased from Rochester Enterprises, Ltd. for a total of $82,000. The Company is pursuing the sale of an additional eighteen claims in the district. 3. Investment in joint venture In April 2003 the Company acquired a 25% interest in two petroleum exploration permits, WA-329-P and WA-322-P, in the North West Shelf area of the Carnarvon Basin, offshore Western Australia, from two unlisted public companies. Mr. E. G. Albers, a former member of the Company's board and a significant shareholder, is a shareholder and director of these two public companies. The area represented by the permits was approximately 356,000 acres, and the project was known as the Exmouth Joint Venture Project. In agreeing to earn a 25% interest in the project, the Company issued 5,000,000 shares of Restricted Common Stock and 19,091,550 shares of Restricted $0.015 Cumulative Convertible Preferred Stock. The Company estimates registration costs to be $40,000. In October 2003, the Company issued an additional 10,000,000 shares of Restricted Common Stock, when taken with the previous issue aforesaid, to meet a $969,550 funding requirement associated with the interest. In May 2004 the Exmouth Joint Venture sold exploration permit WA-322-P to BHP Billiton Petroleum Limited ("BHP"). In return BHP agreed to the acquisition and processing of 3D seismic in the Joint Venture's adjacent exploration permit, WA- 329-P, as well as a $600,000 initial cash payment, a deferred cash payment of $1,100,000 contingent upon BHP drilling a well in WA-322-P, and granting an overriding royalty interest ranging from 2.75 to 3.75 percent on WA-322-P. 8 In July 2004 the Company's 25% share of the initial cash proceeds from the BHP sale, $150,000, was offset against existing Year 2 seismic acquisition obligations pursuant to the Farmin Agreement. As a term of this arrangement the Company entered into an agreement to reacquire 10,000,000 shares of its Common Stock previously issued to Octanex NL and Strata Resources NL, the Company's Joint Venture partners, for no further outlay. In July 2005 the Exmouth Joint Venture finalized a second transaction for the sale of WA-322-P to BHP Billiton Petroleum and Apache Northwest Pty Ltd. The sale consists of the buyers becoming responsible for the terms and conditions of the WA-329-P permit, the payment of $400,000, which was received on August 9, 2005, a deferred cash payment of $1,000,000 contingent upon the drilling of a well, and the grant of an overriding royalty interest ranging from 2.75 to 3.75 percent on WA-329-P. On September 17, 2007, the Company received notice from, BHP and Apache, respectively, that BHP intended to surrender, effectively, to the State of Western Australia, WA-322-P, and BHP and Apache intended to surrender, effectively, to the State of Western Australia, WA-329-P. On October 1, 2007, following the receipt of the Notice, we gave notice to Octanex and Strata to the effect that we did not wish to accept a reassignment of the Permits and, on October 3, 2007, we gave notice to BHP and Apache to the same effect. The Company has recorded an impairment loss of $107,929 at October 31, 2007. 4. Note payable-related party Mr. E. Geoffrey Albers, a former director of the Company who retired on July 31, 2006 and a holder of more than 5% of the common stock, is a director and shareholder of Great Missenden Holdings Pty Ltd. In May 2004, the Company signed a Promissory Note Agreement with Great Missenden Holdings whereby the company borrowed $22,000. During the year ended October 31, 2007, the note was converted into 1,464,100 shares of common stock. The note bore interest of 10% per annum and was payable on or before May 1, 2007. The note was convertible into shares of the Company's common stock at any time after 18 months on the basis of 50,000 shares of common stock for every $1,000. On conversion to equity, the Company recorded an expense of $9,141. On April 30, 2007, the Company entered into a non-negotiable convertible promissory note with Great Missenden Holdings Pty. Ltd. Pursuant to the Note, Great Missenden Holdings Pty Ltd has advanced an aggregate total of $300,000.The Note bears interest at a rate of 9% per annum, and is payable in full on June 30, 2009. The principal amount then outstanding under the Note is convertible by Great Missenden Holdings Pty Ltd at any time into shares of common stock of the Company at a conversion price of $0.025 per share. In addition, the Note is automatically convertible immediately prior to a merger of the Company with a wholly-owned Delaware subsidiary of the Company, into such number of shares of the Company's common stock which would result in the Lender owning 10% of the outstanding shares of the Delaware subsidiary after the merger. The Company recorded a discount on the note of $18,750 relating to the beneficial conversion feature. This discount will be amortized to interest expense over the term of the debt. During 2008, Great Missenden Holdings Pty. Ltd. advanced the Company $84,000. The advance bears interest at the rate of 1% per month. During November 2008, Great Missenden Holdings Pty Ltd converted $96,974 of advances and interest into 15,000,000 Shares of common stock. 9 5. Preferred stock During fiscal 1981, the stockholders voted to amend its Articles of Incorporation to authorize the issuance of preferred stock having a par value of $.05. The Board of Directors designated 44,000,000 shares of the preferred stock as $.015 cumulative convertible preferred stock (hereinafter referred to as "preferred stock"). The holders of the preferred stock are, subject to declaration, entitled to receive $.015 per share annual dividends, and $.10 per share, plus accrued but unpaid dividends, upon liquidation, dissolution or winding up of the Company. The dividends, which may be paid in cash, common stock or gold, are payable annually, if and when declared by the Board of Directors only from earned surplus. Each share of the preferred stock is convertible by the holder, at his option, into .4 shares of common stock. The preferred stock may be called for redemption at $.15 per share, plus accrued but unpaid dividends, either in cash, in common stock or gold. As no profit has been achieved and as no dividends have been declared, no provision has been made for unpaid dividends. (See Note 6) 6. Common stock In connection with a stock purchase agreement consummated on April 22, 1988, with Quillium Nominees Pty., Ltd. (Quillium) pursuant to which 33,333,000 shares of the Company's restricted common stock were issued, the Company agreed to prepare and file a registration statement under the Securities Act of 1933, as amended, for the 33,333,000 shares issued under the agreement. This has not been performed as of July 31, 2008. On October 10, 2007, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement"), with Rocky Mountain Minerals (DE), Inc., a Delaware corporation ("New Rocky"), our wholly-owned subsidiary. Under the Merger Agreement, (a) holders of our common stock, par value $0.001 per share (other than holders who exercise and perfect their dissenters' rights and the Company itself as a holder of treasury shares) will receive, in consideration for each share of such common stock they own, 0.195 shares of common stock, $0.0001 par value, of New Rocky ("New Rocky's Common Stock") and cash in lieu of any fractional shares, and (b) holders of our preferred stock, par value $0.05 per share (other than holders who exercise and perfect their dissenters' rights and the Company itself as a holder of treasury shares) will receive, in consideration for each share of such stock they own, 0.36535 shares of New Rocky's Common Stock and cash in lieu of any fractional shares (the "Merger"). In the Merger, the Company will be merged with and into New Rocky, New Rocky will survive the Merger, and the Company will cease to exist as a separate corporate entity. The Merger will not result in any other change in our business, management, fiscal year, assets, liabilities, or location of our principal facilities. The consummation of the Merger is subject to (a) the Company's approval as New Rocky's sole shareholder, (b) the approval of the Company's shareholders in accordance with applicable provisions of the Wyoming Business Corporation Act, and (c) any and all consents, permits, authorizations, approvals, and orders deemed, in our sole discretion, to be material to consummation of the Merger, including, without limitation, an authorization of New Rocky's Common Stock for quotation on the Over The Counter Bulletin Board (the "OTCBB"), having been obtained. A date for closing the Merger has not yet been determined. On November 20, 2008, the Company completed a transaction with Great Missenden Holdings Pty Ltd to sell 15,000,000 shares of common stock in return for a net cash proceeds of Australian $150,000 (the equivalent of $96,974). The aggregate offering price was $0.00646, there being no underwriting discounts or commission. 7. Income taxes At January 31, 2009, the Company had net operating loss carryforwards for tax purposes of approximately $1,680,000. If not used to offset future taxable income, the carryforwards will expire as follows: 10 Fiscal Year of expiration Amount 2010 108,000 2011 25,000 2017 125,000 2019 29,000 2020 35,000 2021 89,000 2022 135,000 2023 98,000 2024 53,000 2025 399,000 2026 28,000 2027 357,000 2028 199,000 At October 31, 2008 and January 31, 2009, total deferred tax assets and valuation allowances are as follows: October 31, 2008 January 31, 2009 ---------------- ---------------- Net operating loss 580,000 595,000 Write-down of assets held 612,000 612,000 Total 1,192,000 1,207,000 Less valuation allowance (1,192,000) (1,207,000) A 100% valuation allowance has been established against the deferred tax assets, as utilization of the loss carryforwards and realization of other deferred tax assets cannot be reasonably assured. 8. Basic and fully diluted loss per common share Basic and fully diluted loss per common share is based on the weighted average number of shares of common stock outstanding during the three month periods ended January 31, 2009 and January 31, 2008,113,915,269 shares in 2009 and 102,176,139 shares in 2008, and 69,081,078 shares for the period from May 19, 1978 through January 31, 2009. Basic and fully diluted earnings per share are the same in loss periods. 9. Commitments and contingencies Insurance: The Company is, to a significant degree, without insurance pertaining to various potential risks with respect to its properties, including general liability, because it is presently not able to obtain insurance for such risks at rates and on terms, which it considers reasonable. The financial position of the Company in future periods could be adversely affected if uninsured losses were to be incurred. 10. Related party transactions In fiscal 2007, the Company entered into a verbal agreement to reimburse Mr. E. Geoffrey Albers for office space and overhead. Total amounts paid and payable to Mr. E. Geoffrey Albers for office usage during the three month period ended January 31, 2009 was $2,200, as compared to $2,475 in the same period during 2008. During 2005, the Company issued an aggregate of 6,000,000 shares of common stock to two officers of the Company for prior services valued at $180,000. In 2006, the Company issued an aggregate of 4,000,000 shares of common stock to two officers of the Company for services during 2006 valued at $220,000. Regarding the withdrawal from the Carr Boyd and the Falcon Bridge Joint Ventures, Mr Mark Muzzin, our President, is a Director of Strategic Energy Resources Ltd. 11 11. Recent accounting pronouncements During the past year the Financial Accounting Standards Board (FASB), issued several new accounting pronouncements. Following are certain of those pronouncements that may have some applicability to the Company and its subsidiary. FAS No. 157 In September 2006, the Financial Accounting Standards Board (FASB) issued FAS No. 157, Fair Value Measurements, which establishes a fair value hierarchy to measure assets and liabilities, and expands disclosures about fair value measurements. FAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for fiscal years beginning after November 15, 2007. The adoption of FAS No. 157 had no effect on our financial statements. FAS No. 159 In February 2007, the FASB issued FAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities- including an Amendment of FAS No. 115, which allows an entity to choose to measure certain financial instruments and liabilities at fair value. Subsequent measurements for the financial instruments and liabilities an entity elects to fair value will be recognized in earnings. FAS No. 159 also establishes additional disclosure requirements. FAS No. 159 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted provided that the entity also adopts FAS No. 157. The adoption of FAS No. 159 had no effect on our financial statements. In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS No. 141R"). SFAS No. 141R is a revision to SFAS No. 141 and includes substantial changes to the acquisition method used to account for business combinations (formerly the "purchase accounting" method), including broadening the definition of a business, as well as revisions to accounting methods for contingent consideration and other contingencies related to the acquired business, accounting for transaction costs, and accounting for adjustments to provisional amounts recorded in connection with acquisitions. SFAS No. 141R retains the fundamental requirement of SFAS No. 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS No. 141R shall be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We are currently evaluating the requirements of SFAS No. 141R. 12 Item 2. Management's Discussion and Analysis or Plan of Operation. General The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion and analysis should be read in conjunction with the consolidated financial statements contained in the latest Annual Report on Form 10-K dated October 31, 2008. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Statements contained in this Quarterly Report on Form 10-Q include "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular and without limitation, statements contained herein under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations." Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance and achievements, whether expressed or implied by such forward-looking statements, not to occur or be realized. Such forward-looking statements generally are based upon the Company's best estimates of future results, performance or achievement, based upon current conditions and the most recent results of operations. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "believe," "estimate," "project," "anticipate," "continue" or similar terms, variations of those terms or the negative of those terms. You should carefully consider such risks, uncertainties and other information, disclosures and discussions which contain cautionary statements identifying important factors that could cause actual results to differ materially from those provided in the forward-looking statements. Readers should carefully review the risk factors and any other cautionary statements contained in the Company's Annual Report on Form 10-K and other public filings, as well as the risks and uncertainties described below. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: o an inability to complete the Merger, as set forth in "Recapitalization and Reincorporation in Delaware Merger" or obtain its intended benefits; o an inability to complete exploration activities, prove reserves of mineral resources in commercial quantities, extract such mineral resources in a cost-effective and timely manner, and sell such mineral resources on commercially attractive terms; o a lack of managerial control over our projects; o an inability to attract and retain management and qualified employees; o a lack of liquidity and capital resources; o an inability to obtain additional financings on favorable terms; o an inability to meet our financial commitments under existing exploration agreements; o fluctuations or declines in commodity prices and, in particular, in prices of nickel; o land title disputes; o an introduction, withdrawal and timing of new business initiatives and strategies; o changes in political, economic and industry conditions, the interest rate environment, and the financial and capital markets, in either Australia or the United States; o the impact of increased competition; o the impact of future acquisitions or divestitures; o unfavorable resolution of legal proceedings; o the impact, extent and timing of technological changes and the adequacy of intellectual property protection; o the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies; o terrorist activities and international hostilities; and o changes to tax legislation and our tax position. 13 Overview We were incorporated as a corporation under the laws of the State of Wyoming on February 21, 1974 and commenced operations on May 19, 1978. We have been engaged primarily in the acquisition, licensing, development, exploration and operation of properties that we believe may contain mineral resources. We have no proven reserves. Our business focuses on continued search of further mineral resource exploration and production properties in the U.S. and in Australia. Recapitalization and Reincorporation in Delaware Merger On October 10, 2007, we entered into an Agreement and Plan of Merger (the "Merger Agreement"), with Rocky Mountain Minerals (DE), Inc., a Delaware corporation ("New Rocky"), our wholly-owned subsidiary. Under the Merger Agreement, (a) holders of our common stock, par value $0.001 per share (other than holders who exercise and perfect their dissenters' rights and the Company itself as a holder of treasury shares) will receive, in consideration for each share of such common stock they own, 0.195 shares of common stock, $0.0001 par value, of New Rocky ("New Rocky's Common Stock") and cash in lieu of any fractional shares, and (b) holders of our preferred stock, par value $0.05 per share (other than holders who exercise and perfect their dissenters' rights and the Company itself as a holder of treasury shares) will receive, in consideration for each share of such stock they own, 0.36535 shares of New Rocky's Common Stock and cash in lieu of any fractional shares (the "Merger"). If the Merger is completed, we will be merged with and into New Rocky, New Rocky will survive the Merger, and we will cease to exist as a separate corporate entity. The Merger will not result in any other change in our business, management, fiscal year, assets, liabilities, or location of our principal facilities. The main purposes of the Merger are to (a) change our capital structure [to eliminate the preferred stock], and (b) change the state of our incorporation from Wyoming to Delaware. The key intended benefits of the Merger are (a) the fact that the Merger is expected to enhance our ability to undertake financings, without which we will be unable to continue our current business, and (b) the fact that investors are generally more familiar with Delaware law than Wyoming law, and Delaware law affords a greater degree of certainty to investors and corporations. The consummation of the Merger is subject to (a) our approval as New Rocky's sole shareholder, (b) the approval of our shareholders in accordance with applicable provisions of the Wyoming Business Corporation Act, and (c) any and all consents, permits, authorizations, approvals, and orders deemed, in our sole discretion, to be material to consummation of the Merger, including, without limitation, an authorization of New Rocky's Common Stock for quotation on the Over The Counter Bulletin Board (the "OTCBB"), having been obtained. A date for completion of the Merger has not yet been determined. The Merger Agreement may be terminated by our and New Rocky's mutual consent, with no liability on either party's part, except that we will be required to pay all expenses incurred in connection with the Merger, in respect of this Merger Agreement and/or relating thereto. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 of our Annual Report on Form 10-K for the fiscal year ended October 31, 2007. 14 Business Strategy Our business strategy to date has been to attempt to identify locations that we believe may contain mineral resources, to secure a relevant tenement and to under- take exploration, primarily through joint ventures with third parties, with the costs of such activities being shared amongst the joint venture participants. During the quarter, following advice from our consultants, we withdrew from the Carr Boyd joint venture following an extensive sampling program. In addition, we have also withdrawn from the Australian Nickel Joint Venture and the underlying Falcon bridge project before any substantial expenditure was incurred. We did this as a result of the significant fall in the price of nickel (the object of the exploration program) and in order to conserve our limited cash resources. Due to our limited cash resources and the state of the world economic order, we are investigating various options as a means to ensure the ongoing survival of the Company in this climate. We have spent a considerable amount of time and money in preparing the Company for a reorganization of its capital structure, with the object being the merger of the Company into a new entity (new Rocky - Delaware incorporated.) While this remains an objective, our pursuit of this reorganization will of necessity be delayed until such time as the Company is in a position to fund this strategy. Status of Joint Venture Projects Carr-Boyd Joint Venture In December 2006, our subsidiary RMMI Australia Pty Ltd ("RMMI Australia") entered into a joint venture heads of agreement with Audax Resources Ltd ("Audax") and Eagle Bay NL ("Eagle Bay"), each an Australian Stock-Exchange listed company, (the "Carr-Boyd Agreement"), in respect of an unincorporated joint venture, referred to in this document as the "Carr-Boyd Joint Venture," for purposes of exploring and, if warranted, developing and mining sulphide hosted nickel in areas covered by two existing exploration licenses in the State of Western Australia, Australia. Under the Carr-Boyd Agreement, RMMI Australia may contribute AU$1,000,000 (the "Contribution"), to the joint venture expenditure prior to September 30, 2010 (the "Earning Period"), but agreed to spend at least AU$100,000 in the first six months following the execution of the Carr-Boyd Agreement, which has been done. RMMI Australia also agreed to contribute at least AU$48,000 towards the joint venture expenditure for each permit year, being each consecutive 12 month period from the date on which the exploration permits in respect of the tenements were granted. This contribution has been made for next permit year. If RMMI Australia fails to make the Contribution during the Earning Period, both RMMI Australia and Eagle Bay will be deemed to have withdrawn from the Carr-Boyd Joint Venture, subject to certain exceptions. Once RMMI Australia has made the Contribution during the Earning Period, RMMI Australia and Eagle Bay will be deemed to have earned the following interests in the Carr-Boyd Joint Venture: (a) 51% by RMMI Australia, and (b) 19% by Eagle Bay. Until the Contribution has been made, RMMI Australia and Eagle Bay have no interest in the Carr-Boyd Joint Venture. RMMI Australia is the manager of the Carr-Boyd Joint Venture while it is the sole contributor to the expenditure and will have sole authority for determining and carrying out all programs and budgets. Until the receipt of the Contribution, RMMI Australia is required to pay costs in connection with the Carr-Boyd property. The Company has reported on January 23 2009 that RMMI Australia has formally withdrawn from the Carr Boyd Joint Venture. On January 22, 2009, final agreements between all the joint venture participants; RMMI, Audax Resources Limited and Strategic Energy Resources Ltd (formally Eagle Bay Resources N.L) to early termination of the joint venture were agreed to. 15 The agreement terminating the joint venture required the parties to waive the 12 month notice period for termination by RMMI. The decision to withdraw from the Carr Boyd Joint Venture was made acting on advice and recommendation from our technical consultant to the effect that there was little value in remaining in the Carr Boyd project. Over a 2-year period the Company carried out a comprehensive ground reconnaissance exploration program over the Carr Boyd property. A large number of samples were taken and submitted for analysis. The RMMI soil data set was integrated with a Western Mining Corporation historical Carr Boyd data sets, and as a result generated two anomalies at Carr Boyd North and Carr Boyd South. None of the areas targeted for sampling provided an outcome of sufficient merit to proceed to the next stage of exploration. The design of the RMMI soil survey over key areas at Carr Boyd was such as to complete a "once only program" (i.e. due to sample and line spacing, any significant anomalies would be walk-up drill targets). While results generated several areas of interest, with key anomalies field inspected, these inspections provided no drill targets. Within the geological terrain of Carr Boyd, only the Carr Boyd nickel sulphide deposits (not within our acreage) is known, despite 40 years of exploration. During the recent past period of high nickel prices the owners have failed to reopen this deposit, potentially indicating that economics even at the higher prices were not attractive. Our consultant concluded that little obvious value remains and recommended that no further work be undertaken. There were no termination penalties incurred. Australian Nickel Joint Venture On December 6, 2006, RMMI Australia and Eagle Bay entered into a joint venture heads of agreement (the "Eagle Bay Agreement") in respect of an unincorporated joint venture (the "Australian Nickel Joint Venture"), for purposes of exploring and, if warranted, developing and mining sulphide hosted nickel in the State of Western Australia, Australia. The participants in the Australian Nickel Joint Venture will each hold an effective 50% interest in the joint venture. The joint venture is actively searching for suitable nickel areas in the State of Western Australia, Australia. The joint venture has been advised that it has been tentatively successful in its application for an exploration licence in respect of the area known as "Falcon Bridge", to be formally granted once to the participants have complied with the relevant provisions of the Australian "Native (Aboriginal) Title" legislation. Under the Eagle Bay Agreement, RMMI Australia's failure to meet its cash call obligations in connection with the project's expenditures will result in RMMI Australia incurring interest on the unpaid amounts and may result in its interest in the Eagle Bay Agreement being diluted. The Company advises that its wholly owned subsidiary, RMMI Australia Pty Ltd ("RMMI"), has formally withdrawn from the Australian Nickel Joint Venture and the underlying Falcon Bridge Joint Venture, a nickel exploration venture in Western Australia. On March 6, 2009, final agreement between the joint venture participants; RMMI and Strategic Energy Resources Ltd (formally Eagle Bay Resources N.L) to early termination of the joint venture was agreed to. The agreement terminating the joint venture required our co-venturer to waive the 12 month notice period for termination by RMMI. The Company's 50% interest in the Falcon Bridge Joint Venture has been offered to Strategic Energy Resources Ltd for nominal consideration. 16 A decision was taken to withdraw from the Australian Nickel Joint Venture and in particular the Falcon Bridge Joint Venture, before any material expenditure had to be incurred. This decision was made based on the significant reduction in the market price of nickel, and following a change of direction by our joint venture partner. The current economic climate and the medium term outlook are regarded as not being conducive to a high risk nickel exploration program. There were no termination penalties incurred by RMMI. The Company intends to dispose of our now dormant subsidiary, RMMI. Mr Mark Muzzin, our President, is a director of Strategic Energy Resources Ltd. Financial Condition We have not been profitable or generated significant cash flows from business operations from inception to date and have no operating revenue. We have funded our operations through financings, including issuances of stock in satisfaction or our obligations, with related parties. The following table sets forth certain relevant measures of our liquidity and capital resources: Year ended Three months October 31, 2008 January 31, 2009 (in $000, (in $000, except ratios) except ratios) -------------- -------------- Cash and cash equivalents 5 25 Working Capital (deficit) (458) (383) Current Assets 5 25 Current liabilities 463 408 Ratio of current assets to current liabilities .01 .06 Stockholders' equity (deficit) * * per common share * Less than $.01 per share. We have not been profitable to date and have no operating revenue. We incurred net losses of approximately $177,000 in the year ended October 31, 2008 and $357,000 and $28,000 on the years ended October 31, 2007 and October 31, 2006, respectively and had accumulated losses of approximately $6,569,000 as of October 31, 2008. We currently hold only approximately $25,000 in cash, as a result of receiving the proceeds of the issuance of the Convertible Note described in the following paragraph. On April 30, 2007 we entered into a non-negotiable convertible promissory note, referred to in this document as the Convertible Note, with Great Missenden Holdings Pty Ltd ("Missenden"), an Australian proprietary limited liability company. Ernest Geoffrey Albers, our former director who retired on July 31, 2006, who is our substantial shareholder, is the major shareholder of Missenden. Pursuant to the Convertible Note, Missenden advanced a total of $300,000 to us. The Convertible Note bears interest at a rate of 9% per annum, and was payable in full on June 30, 2008. This date has been extended by one year, and is now payable in full on June 30, 2009. The Convertible Note is automatically convertible immediately prior to the Merger into such number of shares of our common stock which would result in Missenden owning 1% of New Rocky's Common Stock immediately after the Merger for each $30,000 of outstanding principal under the Convertible Note at the time of the Merger, up to a total of 10%. Accordingly, it is expected that, immediately prior to the Merger, the Convertible Note will be automatically converted into such number of our common stock which will result in Missenden owning 10% of New Rocky's Common Stock immediately after the Merger. As of the date of this report, we owed Missenden a total of approximately $316,000 plus accrued interest . No payments of principal or interest have been made on the Convertible Note during its term. 17 Our cash has increased from $2,000 to $25,000 from October 31, 2008 to January 31, 2009 (from the issue of shares reported on November 20, 2008). Our current liabilities decreased from $463,000 to $408,000 from October 31, 2008 to January 31, 2009, due to the reduction of the debt under the Convertible Note. We had a working capital deficit of $458,000 and a current ratio (a ratio of our current assets to our current liabilities) of 0.01 as of October 31, 2008, compared to a working capital deficit of $383,000 and a current ratio of 0.06 as of January 31, 2009, and due to the increase in our current assets and decrease in our current liabilities as a result of the conversion of debt into equity during the quarter. We expect we will require approximately $120,000 to complete the merger. Additionally, if shareholders dissenting from the Merger exercise their rights of appraisal, we may be required to pay significant amounts to such shareholders. In the absence of an additional financing or financings, we will not have sufficient funds to pay such amounts in connection with dissenting shareholders' appraisal rights. The financial requirements described in the preceding paragraphs of this section "--Liquidity and Capital Resources" will have the effect of decreasing our liquidity and exhausting our cash resources within 3 months. We will not be able to meet such requirements without additional financings. We expect that financings totalling at least $50,000 will be required by us in the next 3 months and financings totalling at least an additional $150,000 will be required by us in the next 12 months, to meet our working capital requirements and capital commitments. To meet our working capital requirements, we or, if the such financing is undertaken following the Merger, New Rocky, may seek to undertake a capital raising from a variety of sources, or a partial or complete sale of our exploration interest or interests. Additionally, we are currently pursuing the sale of eighteen mining claims in relation to our Rochester property. There is no assurance that a financing or financings will be available to us on attractive terms or at all, particularly, given the fact that there is substantial competition for capital available for investment in the mineral resource exploration industry, and our existing capital structure (which capital structure, we believe, makes a financing prior to the Merger extremely difficult). We believe that, in the absence of the Merger, our existing capital structure makes financings extremely difficult. In particular, among other things, this is due to the fact that interests of any new equity investors would be subordinated to those of the existing holders of preferred stock, both in the event of a liquidation and, effectively, as to dividends. No dividends could be paid to holders of common stock without the holders of the cumulative preferred stock first receiving cumulative preferred dividends accrued over a number of years. We believe that these circumstances would make an equity investment in us extremely unattractive to potential investors, at least until after the Merger has been consummated. If we cannot obtain additional financings on favorable terms, our operating results and financial condition will be adversely affected, our current business will likely have to be discontinued, we may be wound-up, and you will likely be unable to recover your investment in us. 18 Results of Operations We did not have operating revenue in our 2006, 2007 and 2008 fiscal years. Our net loss in our 2008 fiscal year was $178,000, compared to $357,000 in our 2007 fiscal year and $28,000 in our 2006 fiscal year. The increase in our net loss from our 2006 to our 2007 fiscal year was a result of an increase in the following expenses: legal fees for the preparation of Merger documents, and exploration expenses for the Carr Boyd Joint Venture. In turn, the increases in our exploration expenses were incurred due to the increase in our joint venturing and exploration activities in 2007. The increase in our legal expenses resulted from the fact that we undertook activities in connection with the Merger, the Merger Agreement and the expected related joint proxy statement/prospectus and shareholder vote, in our fiscal 2007 year. We expect that our costs will decrease substantially in our fiscal year 2009, due to no exploration activity. We will incur ongoing reporting costs, office overheads and general corporate costs until the merger is completed. We incurred net losses of approximately $22,000 for the three months ended January 31, 2009, as compared to approximately $94,000 for the three months ended January 31, 2008, an decrease of 77%, and had accumulated losses of approximately $6,591,000 as of January 31, 2009. Critical Accounting Policies Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments. The going concern basis of presentation assumes we will continue in operation throughout fiscal year 2009 and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Our auditors stipulated in their report dated February 13, 2009, as filed with our Annual Report on Form 10-K for the fiscal year ended October 31, 2008, that they had substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of the uncertainty. Undeveloped Mineral Interests and Oil and Gas Properties The Company utilized the "successful efforts" method of accounting for undeveloped mineral interests and oil and gas properties. Capitalized costs were charged to operations at the time the Company determined that no economic reserves existed. Costs of sampling and retaining undeveloped properties were charged to expense when incurred. Mineral exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, costs incurred prospectively to develop the property are capitalized as incurred and are amortized using the units of production method over the estimated life of the ore body based on estimated recoverable ounces or pounds in proven and probable reserves. Proceeds from the sale of undeveloped properties were treated as a recovery of cost. Proceeds in excess of the capitalized cost realized in the sale of any such properties, if any, were to be recognized as gain to the extent of the excess. 19 Impairment of Long-lived Assets The Company evaluates the potential impairment of long-lived assets in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The Company annually reviews the amount of recorded long-lived assets for impairment. If the carrying amount of a long-lived asset is not recoverable from its undiscounted cash flows, the Company will recognize an impairment loss in such period. Recent Accounting Pronouncements In September 2006, the Financial Accounting Standards Board (FASB) issued FAS No. 157, Fair Value Measurements, which establishes a fair value hierarchy to measure assets and liabilities, and expands disclosures about fair value measurements. FAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for fiscal years beginning after November 15, 2007, which is our current fiscal year. We are currently evaluating the potential impact, if any, of the adoption of FAS No. 157 on our financial statements. In February 2007, the FASB issued FAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities- including an Amendment of FAS No. 115, which allows an entity to choose to measure certain financial instruments and liabilities at fair value. Subsequent measurements for the financial instruments and liabilities an entity elects to fair value will be recognized in earnings. FAS No. 159 also establishes additional disclosure requirements. FAS No. 159 is effective for fiscal years beginning after November 15, 2007, which is our current fiscal year, with early adoption permitted provided that the entity also adopts FAS No. 157. We are currently evaluating whether to adopt FAS No. 159 and, if adopted, the impact of such adoption. On November 1, 2007, we adopted the provisions of FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes - an interpretation of FAS No. 109, which provides a financial statement recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Under FIN 48 we may recognise 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 benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate settlement. FIN 48 also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. The adoption of FIN 48 had no impact on our financial position and our results of operations. Item 4T. Controls and Procedures a) Evaluation of Controls and Procedures. As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report. We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision of our principal executive officer (who also serves as our principal financial officer), who concluded, that because of the material weakness in our internal control over financial reporting described below that, our disclosure controls and procedures were not effective as of January 31, 2009. A material weakness is a deficiency or a combination of deficiencies in internal controls over financial reporting such that there is not a reasonable possibility that material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. 20 (b) Internal Control Over Financial Reporting. Management of the Company is also responsible for establishing internal control over financial reporting as defined in Rule 13a-15(f) and 15(d)-15(f) under the Securities Act of 1934. The Company's internal control over financial reporting are intended to be designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company's internal controls over financial reporting are expected to include those policies and procedures that management believes are necessary that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principals, and the receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. In evaluating internal controls, management considered the amount of the Company's financial activities and resources. We have for the past several years retained a part-time bookkeeper to assist its sole officer in completing the financial reporting process, but ultimately our principal executive and financial officer, is responsible not only for controls, but also for all other aspects of the Company's general ledger, disbursements and receipts, and financial statement preparation. Management assessed the effectiveness of the Company's internal control over financial reporting as of January 31, 2009. Although the Company has financial controls and related procedures in place, the Company lacked the resources to implement the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework, and therefore did not utilize this framework, or any other approved framework to assess the Company's internal control over financial reporting. Accordingly, our chief executive officer/chief financial officer was unable to assess the Company's internal controls over financial reporting in accordance with an established framework and, therefore, identified a material weakness in our internal controls over financial reporting. As a result of this material weakness, management concluded that the Company's internal control over financial reporting as of January 31, 2009 was not effective. The Company does not intend to immediately take any action to remediate this material weakness until the Company acquires sufficient financing and engaged in business operations, the Company does work with consultants or other third parties to prepare its financial statements and will implement further internal financial controls as circumstances permit. There were no changes in our internal controls or in other factors that could significantly affect these internal controls subsequent to the date of their evaluation. 21 Part II. OTHER INFORMATION Item 6. Exhibits List of Exhibits 31 Rule 13a-14(a)/15d-14(a) Certification 32 Section 1350 Certification SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROCKY MOUNTAIN MINERALS, INC. (Registrant) By: /s/ Mark A. Muzzin ------------------ Mark A. Muzzin, Chief Executive Officer and Chief Financial Officer March 23, 2009 22

ROCKY MOUNTAIN MINERALS INC 10-Q