<PAGE>
                                          
                  UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC 20549
                                    FORM 10-QSB

                                          
[ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1998

          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:  001-12063

                            ROCKY MOUNTAIN INTERNET, INC
                ----------------------------------------------------
                Exact name of Registrant as specified in its charter

Delaware                                              84-1322326     
--------                                              ------------
State or other jurisdiction of                        IRS Employer
incorporation or organization                         Identification

1099 18th Street, Suite 3000  DENVER COLORADO         80202
---------------------------------------------         ------------
Address of principal executive offices                Zip Code

Registrant's telephone number, including area code:   303-672-0700
                                                      ------------
Former name, former address and former fiscal year, if changed since last
report:   NA

Indicate by check mark whether the Registrant (1) has filed all annual,
quarterly and other 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 periods 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
                                      ----    ----

As of July 31, 1998, Rocky Mountain Internet, Inc. had approximately 
7,812,000 shares of common stock, $.001 par value, outstanding.

Transitional Small Business Disclosure Format (check one) Yes [ ]No [X]

                                   Page 1
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS


                         ROCKY MOUNTAIN INTERNET, INC.
                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
                                    ASSETS

<TABLE>
<CAPTION>
                                                   December 31,        June 30
                                                      1997               1998
                                                     (Note)           (Unaudited)
<S>                                                <C>            <C>
Current assets
   Cash and Cash equivalents                        $  1,053,189   $     761,965 
   Trade receivables, less allowance for 
   doubtful accounts 12/31/1997 - $176,000; 
   6/30/1998 - $221,962                                  672,094         635,025
   Inventories                                            46,945          61,384 
   Other                                                 112,891         112,186 
                                                    ------------   -------------
               Total current assets                 $  1,885,119   $   1,570,560
                                                    ------------   -------------
Property and equipment                           
   Equipment                                           2,927,016       3,310,699
   Computer software                                     218,801         229,427 
   Leasehold Improvements                                190,235         189,234 
   Furniture, fixtures, and office equipment             431,814         431,814 
                                                    ------------   -------------
                                                    $  3,767,866   $   4,161,174
   Less accumulated depreciation and amortization      1,118,217       1,548,923
                                                    ------------   -------------
                                                    $  2,649,649   $   2,612,251
                                                    ------------   -------------
Other assets                                     
   Goodwill                                                    -       1,323,633
   Customer lists                                        471,096         412,727 
   Investments                                                 -           3,000 
   Deferred acquisition costs                                  -         245,082
   Deposits                                               76,255          76,255
                                                    ------------   -------------
                                                         547,351       2,060,697
                                                    ------------   -------------
                                                    $  5,082,119   $   6,243,508
                                                    ------------   -------------
                                                    ------------   -------------
</TABLE>

Note: The Consolidated Balance Sheet information as of December 31, 1997 has 
been derived from the Company's audited financial statements appearing in 
Form 10-KSB previously filed with the U.S. Securities and Exchange Commission.

                   See Notes to Consolidated Financial Statements

                                   Page 2
<PAGE>

                           ROCKY MOUNTAIN INTERNET, INC.
                            CONSOLIDATED BALANCE SHEETS
                                    (UNAUDITED)
                        LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                    December 31,     June 30
                                                       1997           1998
                                                      (Note)       (Unaudited)
<S>                                                 <C>           <C>
Current liabilities                              
   Current maturities of long-term debt and         $   609,390    $    674,957 
     obligations under capital leases
   Accounts payable                                     581,366       1,628,141 
   Deferred revenue                                     345,857         315,476 
   Accrued payroll and related taxes                    182,569         172,932 
   Other accrued expense                                374,940         345,337
                                                    ------------   -------------
               Total current liabilities            $ 2,094,122    $  3,136,843
                                                    ------------   -------------
Long-term debt and obligations under capital                    
   leases, less current maturities                  $   904,627    $    629,354 
                                                    ------------   -------------
Stockholders equity
   Preferred stock, $.001 par value; authorized
   12/31/1997 - 790,000, 6/30/1998 - 750,000
   shares; issued and outstanding 12/31/1997,
   40,000 shares, 6/30/1998, 0 shares               $        40    $          - 

   Common stock, $.001 par value; authorized 1997
   - 10,000,000 shares, 6/30/1998 - 25,000,000
   shares; issued 12/31/1997 - 6,736,889 shares;
   6/30/1998 - 7,582,347 shares; and outstanding
   12/31/1997 - 6,677,846 shares, 6/30/1998 - 
   7,518,267 shares                                       6,737           7,582
   Additional paid-in capital                         9,284,720      11,334,838
   Accumulated deficit                               (6,747,050)     (8,780,445)
   Unearned compensation                               (383,077)              -
                                                    ------------   -------------
                                                    $ 2,161,370    $  2,561,975
   Treasury stock, at cost
     Common; 12/31/1997 - 59,043 shares,
     6/30/1998 - 64,080                                 (78,000)        (84,664)
                                                    ------------   -------------
   Total stockholders' equity                       $ 2,083,370    $  2,477,311 
                                                    ------------   -------------
                                                    $ 5,082,119    $  6,243,508 
                                                    ------------   -------------
                                                    ------------   -------------
</TABLE>

                   See Notes to Consolidated Financial Statements

                                  Page 3
<PAGE>

                         ROCKY MOUNTAIN INTERNET, INC.
                           STATEMENTS OF OPERATIONS
                                 (UNAUDITED)
<TABLE>
<CAPTION>
                                                    Three Months Ended                       Six Months Ended
                                                         June 30,                                June 30, 
                                             -------------------------------------------------------------------------
                                                  1997                1998             1997               1998
                                             ---------------    ---------------   ---------------      ---------------
<S>                                          <C>                <C>               <C>                  <C>
Revenue                                               
     Internet access and services             $ 1,332,071           $2,034,787       $ 2,645,785           $ 3,748,103 
     Equipment sales                              120,342              126,972           203,586               192,941 
                                             ---------------    ---------------   ---------------      ---------------
                                                1,452,413            2,161,759         2,849,371             3,941,044
                                             ---------------    ---------------   ---------------      ---------------
Cost of revenue earned                       
     Internet access and services                 490,155              632,533           927,265             1,233,665 
     Equipment sales                               97,263               99,394           161,128               150,350 
                                             ---------------    ---------------   ---------------      ---------------
                                                  587,418              731,927         1,088,393             1,384,015 
                                             ---------------    ---------------   ---------------      ---------------
       Gross Profit                               864,995            1,429,832         1,760,978             2,557,029

Selling, general and administrative expenses    1,908,932            2,023,842         3,617,999             4,478,171
Other operating expenses                          334,371               72,552           334,112                (2,434)
                                             ---------------    ---------------   ---------------      ---------------
   Operating (loss) income                     (1,378,308)            (666,562)       (2,191,133)           (1,918,708)


Other income (expense)                       
     Interest expense                            (106,988)             (74,498)         (185,921)             (154,729)
     Other income (expense)                         1,211               (2,186)           (9,807)               (2,746)
     Interest income                                6,009               14,436            18,637                25,728 
     Finance charges                                  229                9,769               416                17,060 
                                             ---------------    ---------------   ---------------      ---------------
                                                  (99,539)             (52,479)         (176,675)             (114,687)
                                             ---------------    ---------------   ---------------      ---------------
Net (loss) income before income taxes          (1,477,847)            (719,041)       (2,367,808)           (2,033,395)
       Income tax expense                               -                    -                 -                     -
                                             ---------------    ---------------   ---------------      ---------------
Net (loss) income                             $(1,477,847)          $ (719,041)      $(2,367,808)          $(2,033,395)
Preferred stock dividends                               -                    -            25,000                     -
                                             ---------------    ---------------   ---------------      ---------------
Net loss applicable to common stockholders    $(1,477,847)          $ (719,041)      $(2,392,808)          $(2,033,395)
                                             ---------------    ---------------   ---------------      ---------------
                                             ---------------    ---------------   ---------------      ---------------
Basic and diluted loss per share
   Net earnings (loss) per share              $     (0.31)          $    (0.10)      $     (0.51)          $     (0.29)
                                             ---------------    ---------------   ---------------      ---------------
                                             ---------------    ---------------   ---------------      ---------------
</TABLE>

                   See Notes to Consolidated Financial Statements

                                   Page 4
<PAGE>

                         ROCKY MOUNTAIN INTERNET, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (UNAUDITED)

<TABLE>
<CAPTION>
                                                               Six Months Ended
                                                                    June 30,
                                                      ----------------------------------
                                                          1997                  1998
                                                      ---------------     --------------
<S>                                                   <C>                 <C>
Cash Flows from Operating Activities                          
   Net (loss) income                                  $(2,367,808)         $ (2,033,395)
   Items not requiring (providing) cash:
     Depreciation and amortization                        413,074               489,075 
     Stock option compensation                                  -               383,077
     Common stock contribution to pension plan                  -                39,994
     Changes in assets and liabilities:
         Trade receivables                                (94,213)               38,489
         Inventories                                       61,788               (14,439)
         Other current assets                             113,486                  (715)
         Accounts payable                               1,012,478             1,046,775 
         Deferred revenue                                  38,862               (30,381) 
         Accrued payroll and related taxes               (392,103)               (9,637) 
         Other accrued expenses                           144,879               (29,603)
                                                      ---------------     --------------
            Net cash used in operating activities     $(1,069,557)         $   (120,760)
                                                      ---------------     --------------

Cash Flows from Investing Activities               
   Proceeds from investments                              779,711                     -
   Acquisition of ONE,Inc. assets                        (150,000)                    -
   Additions to deferred acquisition cost                       -              (245,082)
   Purchase of property and equipment                    (200,950)             (276,834)
   Additions to deposits and Investments                  (13,873)                (3000)
                                                      ---------------     --------------
         Net cash provided by (used in) 
           investing activities                       $   414,888          $   (524,916)
                                                      ---------------     --------------

Cash Flows from Financing Activities               
   Proceeds from notes payable                            495,000                     - 
   Proceeds from long-term debt                           312,582                     - 
   Proceeds from sale of common stock                     400,500               687,265
   Payment of preferred stock dividend                    (25,000)                    -
   Purchase of treasury stock                             (42,000)              (18,000)
   Payments on long-term debt and obligations
     under capital leases                                (396,092)             (314,813)
                                                      ---------------     --------------
         Net cash provided by financing activities    $   744,990          $    354,452 
                                                      ---------------     --------------
         Increase (decrease) in cash and cash
           equivalents                                $    90,321          $   (291,224) 

Cash and cash equivalents                          
   Beginning                                              348,978             1,053,189 
                                                      ---------------     --------------
   Ending                                             $   439,299          $    761,965 
                                                      ---------------     --------------
                                                      ---------------     --------------

Schedule of noncash investing and financing activities
   Acquisition of Infohiway by issuance of 
   common stock                                       $         -          $  1,335,000
                                                      ---------------     --------------
                                                      ---------------     --------------
</TABLE>

                   See Notes to Consolidated Financial Statements

                                  Page 5

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1    REPRESENTATION OF MANAGEMENT

The interim financial data are unaudited; however, in the opinion of 
management, the interim data include all adjustments, consisting only of 
normal recurring adjustments necessary for a fair statement of the results 
for the interim periods.  The financial statements included herein have been 
prepared by the Company pursuant to the rules and regulations of the 
Securities and Exchange Commission.  Certain information and footnote 
disclosures normally included in financial statements prepared in accordance 
with generally accepted accounting principles have been condensed or omitted 
pursuant to such rules and regulations, although the Company believes that 
the disclosures included herein are adequate to make the information 
presented not misleading.

NOTE 2    EARNINGS PER SHARE

The Earnings per Share calculation is based on average shares outstanding of 
7,073,479 for the six months ended June 30, 1998.  All stock options and 
warrants are excluded from the computation of diluted earnings per share, as 
they would have an anti-dilutive effect on earnings (loss) per share. In 
accordance with FASB 128 earnings per share for prior periods have been 
restated in these financial statements.

NOTE 3    INCREASE IN AUTHORIZED SHARES

A stockholders' meeting was held on March 12, 1998.  At this time the 
stockholders approved an amendment to the Company's Certificate of 
Incorporation to increase the number of authorized shares of the Company's 
common stock from 10,000,000 to 25,000,000.

NOTE 4    1998 EMPLOYEES' STOCK OPTION PLAN

On March 12, 1998, the stockholders approved an employee incentive stock 
option plan.  This plan reserves 266,544 shares of Common Stock for issuance 
over the ten-year term of the plan.

NOTE 5    APPROVAL OF 401K PLAN

The Board of Directors has approved a 401(k) Savings and Retirement Plan that 
will cover substantially all employees effective January 16, 1998.  The 
Company's contributions to the Plan will be determined annually by the Board 
of Directors.

NOTE 6    ACQUISITIONS

On June 5, 1998, the Company acquired all of the outstanding common stock of 
Infohiway Inc. pursuant to the terms of a Merger Agreement dated June 5, 1998 
by and among the Company, RMI Subsidiary, Inc., Infohiway and Kenneth Covell, 
John-Michael Keyes and Jeremy J. Black, the shareholders of Infohiway.  
Infohiway has developed a search engine which the Company believes has unique 
data searching features.  For the year ended December 31, 1997, Infohiway had 
gross revenues of $31,000.  The acquisition was effectuated by the merger of 
RMI Subsidiary, Inc., a wholly-owned subsidiary of the Company, with and into 
Infohiway.  As a result of the merger, Infohiway became a wholly-owned 
subsidiary of the Company. Pursuant to the Merger Agreement, the shareholders 
of Infohiway received an aggregate of 150,000 shares of the Company's Common 
Stock valued at $1,335,000. Substantially all of the purchase price has been 
allocated to goodwill that will be amortized on a straight-line basis over a 
five year life. Consolidated operations of the company would not have been 
significantly different had the acquisition been made January 1, 1998. 

                                  Page 6
<PAGE>

On July 1,1998 the company acquired all of the outstanding common stock of 
Applications Methods, Inc. Applications Methods develops software and has 
recently developed an e-commerce product. The Company issued 286,396 shares 
of common stock valued at $3,239,000 the acquisition has been recorded as a 
purchase. $3,211,000 of the purchase price will be allocated to goodwill. Pro 
forma consolidated operations for the six-months ended June 30, 1998, 
assuming the purchase was made at the beginning of 1998 is shown below:

     Net Sales                $  4,655,000
     Net Loss                 $ (1,976,000)
     Net Loss per share       $       (.28)

The pro forma results are not necessarily indicative of what would have 
occurred had the acquisition been on these dates, nor are they necessary 
indicative of future operations.

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

Certain information contained in this Form 10-QSB, including "Management's 
Discussion and Analysis of Financial Condition and Results of Operations", 
contain forward-looking statements. The forward-looking statements herein are 
based on current expectations that involve a number of risks and 
uncertainties. Such forward-looking statements are based on assumptions that 
the Company will continue to design, market and provide successful new 
services, that competitive conditions will not change materially, that demand 
for the Company's services will continue to grow, that the Company will 
retain and add qualified personnel, that the Company's forecasts will 
accurately anticipate revenue growth and the costs of producing that growth, 
and that there will be no material adverse change in the Company's business.  
In light of the significant uncertainties inherent in the forward-looking 
information included in this Form 10-QSB, actual results could differ 
materially from the forward-looking information contained in this Form 
10-QSB.  

Year 2000 Risks.  Currently, many computer systems, hardware, and software 
products are coded to accept only two digit entries in the date code field 
and, consequently, cannot distinguish 21st century dates from 20th century 
dates.  As a result, many companies' software and computer systems may need 
to be upgraded or replaced in order to comply with such "Year 2000" 
requirements.  The Company and third parties with which the Company does 
business rely on numerous computer programs in their day to day operations.  
The Company has begun the process of identifying computer systems that could 
be affected by the Year 2000 issue but has not estimated the costs of 
addressing the Year 2000 issue as it relates to the Company's internal 
hardware and software, as well as third party computer systems with which the 
Company interacts.  In the event that the Company acquires other assets or 
businesses, the software and hardware acquired by the Company in connection 
with those business combinations may be Year 2000 non-compliant.  There can 
be no assurance that the Year 2000 issues will be resolved in 1998 or 1999.  
The Company may incur significant costs in resolving its Year 2000 issues.  
If not resolved, this issue could have a significant adverse impact on the 
Company's business, operating results, financial condition, and cash flow.

The Company's common stock is traded on the Nasdaq SmallCap Market.  

                                  Page 7
<PAGE>

RECENT DEVELOPMENTS

RMI entered into an Agreement and Plan of Merger dated as of June 5, 1998 by 
and among RMI, Internet Communications Corporation ("ICC") and Internet 
Acquisition Corporation, a Colorado corporation and wholly-owned subsidiary 
of RMI (the "ICC Merger Agreement") pursuant to which RMI agreed, subject to 
the conditions set forth therein, acquire ICC. ICC is a Denver-based 
telecommunications company that designs, implements, maintains and manages 
communications systems and networks. Consummation of the ICC Acquisition is 
subject to the satisfaction of various closing conditions, including approval 
of the merger by ICC's shareholders at the shareholders' meeting scheduled 
for the end of August 1998, and is expected to close shortly thereafter.  The 
Company currently intends, subject to market and other conditions, including 
the prior consummation of the ICC Acquisition, to complete an offering (the 
"Private Placement Offering") of approximately $175.0 million in a private 
placement of high yield securities pursuant to Rule 144A.  The securities to 
be offered in the Private Placement Offering will consist of senior notes 
(and may include other securities) and will not be registered under the 
Securities Act of 1933 or applicable state securities laws. The Private 
Placement Offering will be made only by means of an offering memorandum.  The 
Issuer has obtained a bridge loan commitment from lenders to fund the ICC 
Acquisition if the Private Placement Offering is not completed. 

On June 5, 1998, RMI acquired all of the outstanding common stock of 
Infohiway Inc. ("INFOHIWAY") pursuant to the terms of a Merger Agreement 
dated June 5, 1998 by and among RMI, RMI Subsidiary, Inc., Infohiway and 
Kenneth Covell, John-Michael Keyes and Jeremy J. Black, the shareholders of 
Infohiway (the "Infohiway Merger Agreement").  Infohiway has developed a 
search engine which the Company believes has unique data searching features.  
For the year ended December 31, 1997, Infohiway had gross revenues of 
$31,000.  The acquisition was effectuated by the merger of RMI Subsidiary, 
Inc., a wholly-owned subsidiary of RMI, with and into Infohiway.  As a result 
of the merger, Infohiway became a wholly-owned subsidiary of RMI.  Pursuant 
to the Infohiway Merger Agreement, the shareholders of Infohiway received an 
aggregate of 150,000 shares of RMI Common Stock.

On July 1, 1998, RMI acquired all of the outstanding common stock of 
Application Methods Inc. ("Applications Methods")  Based in Seattle, 
Washington, Application Methods develops software and has recently developed 
an e-commerce product.  For the year ended December 31, 1997, Application 
Methods had gross revenues of $984,000.  Pursuant to the terms of a Merger 
Agreement by and among RMI, RMI Acquisition Subsidiary, Inc. ("RMI 
Acquisition"), a Washington corporation and wholly-owned subsidiary of RMI, 
Application Methods and Ronald M. Stevenson, Gregory A. Brown and Ronald 
Nicholl, the shareholders of Application Methods, Application Methods' 
shareholders received an aggregate of 286,369 shares of RMI Common Stock as a 
result of the merger of RMI Acquisition with and into Application Methods.  
The Application Methods shareholders may receive additional shares of Common 
Stock, not to exceed $ 2.5 million in value, based on the satisfaction of 
certain post-merger performance targets over a three-year period.

Additionally, RMI recently entered into a non-binding memorandum of 
understanding regarding the possible acquisition of Internet Now Inc., an ISP 
located in Phoenix, Arizona for approximately $1.5 million in cash.

The Company is implementing several new service offerings.

NATIONAL INTERNET PROVIDER   Effective March 11, 1998, the Company entered 
into an agreement with PSINet, Inc., whereby the Company obtains access to 
PSINet's network to provide the Company's customers access to dialup and 
"switched" network access in over 235 locations nationally.  The agreement 
allows the Company to expand service nationally to provide dial up and ISDN 
services in each of the locations serviced by PSINet.  Customers will receive 
technical 

                                  Page 8
<PAGE>

support, e-mail services, news services, etc., from the Company's servers, 
providing a "private label" solution to the anticipated new customer base.

IP TELEPHONY  The Company is expanding its communication services in order to 
provide a more complete product offering to its customers.  The Company has 
announced its intent to provide long distance services using Internet 
Protocol ("IP") telephony at $0.07 per minute within the continental United 
States to customers in Denver, Boulder, and Colorado Springs, Colorado areas. 

COMPETITIVE local exchange carrier  On April 22, 1998, The Public Utilities 
Commission of the State of Colorado granted the request by Rocky Mountain 
Broadband, Inc. to become a COMPETITIVE local exchange carrier ("C-LEC").

The Company may experience fluctuations in operating results in the future 
caused by various factors, some of which are outside of the Company's 
control, including general economic conditions, specific economic conditions 
in the Internet access industry, user demand for the Internet, capital 
expenditures and other costs relating to the expansion of operations, the 
timing and number of customer subscriptions, the introduction of new services 
by the Company or its competitors, the mix of services sold and the mix of 
distribution channels through which those services are sold.  In addition, 
the Company's expenses, including but not limited to obligations under 
equipment leases, facilities leases, telephone access lines, and Internet 
access are relatively fixed in the short term, and therefore variations in 
the timing and amount of revenues could have a material adverse effect on the 
Company's results of operations. 

Following the completion of the Private Placement Offering (or the Bridge 
Loan Commitment in the absence of completing the Private Placement Offering), 
the Company will be highly leveraged.  At June 30, 1998, on a pro forma, 
consolidated basis after giving effect to the Private Placement Offering, the 
ICC Acquisition and the acquisitions of Infohiway and Application Methods, 
the Company would have had approximately $177 million of indebtedness 
outstanding (including capital lease obligation).  The degree to which the 
Company is leveraged could have important consequences to shareholders, 
including the following: (la) a substantial portion of the Company's cash 
flow will be dedicated to payment of the interest on its indebtedness, 
thereby reducing available funds for other purposes; (ii) the Company's 
significant degree of leverage could increase it's vulnerability to changes 
in general economic conditions or in the event of a downturn in its business; 
(iii) the Company's flexibility in planning for or reacting to changes in the 
market conditions may be limited; (iv) the Company's ability to obtain 
additional financing for working capital, capital expenditures, acquisitions, 
general corporate purposes or other purposes could be impaired; and (v) the 
Company may be more leveraged than certain of it's competitors, which may be 
a competitive disadvantage.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1997 AND 1998

The Company's revenues grew 49% from $1,452,400 to $2,161,800 for the three 
months ended June 30, 1998 as compared to the comparable period in 1997. 
Revenue growth performance is attributable to increasing size of the sales 
force and segmenting the sales team by product group. 

                                  Page 9
<PAGE>

DIAL-UP SERVICE

The Company experienced a 21% revenue increase in dial-up service and at the 
same time decreased its offering price per customer, from the second quarter 
of 1997 as compared to the second quarter of 1998 from $571,000 to $692,900. 
The increase is due to the establishment of a dial-up sales department in 
1998.  

DEDICATED ACCESS SERVICE

Dedicated access services are primarily provided to commercial customers and 
include a wide range of connectivity options tailored to the requirements of 
the customer.  These services include private port (dedicated modem), 
Integrated Services Digital Network (ISDN) connections, 56 Kbps frame relay 
connections, DS-1 (1.54 Mbps) frame relay connections, point to point 
connections, and DS-3 (45 Mbps) or fractional DS-3 connections.  The Company 
also offers a co-location service, in which the customer's equipment is 
located in the RMI data center, thereby providing access to the Internet 
directly through the Company's connection.

Dedicated access service business has grown based principally on ISDN and 
high speed circuits (56K, DS-1, and DS-3) growth.  ISDN sales have grown from 
$150,300 to $225,400 from the second quarter of 1997 to the second quarter of 
1998 for an increase of 50%, while sales of high speed circuits services have 
increased from $211,500 to $390,700 for the same periods, for an increase of 
85%.

WEB SERVICES

Web services revenues are comprised of web site hosting, web site production 
and web site marketing.  Web site hosting provides ongoing revenue from 
customers for whom RMI hosts a web site on web servers in the RMI data 
center.  All access made to these web sites by the customer and the Internet 
community as a whole are processed on the Company's servers.  The advantage 
to customers is high speed access to sites by their targeted audiences

Web site hosting accounted for $114,700 of revenue in the second quarter of 
1997 and $161,100 in the second quarter of 1998 for an increase of 40%.   

Web site production increased from $136,700 for second quarter 1997 to 
$197,700 for second quarter 1998, for an increase of 45%. 

The Company added a new service, web site marketing, to customers in late 
1997. For the second quarter of 1998, revenues of $31,800 were recognized for 
this service.  Web site marketing offers the customer a service wherein the 
Company optimizes the position in web search engines for a customer's site 
based on queries by selected key words.  This service is intended to result 
in a significant increase in the level of traffic for a web site. 

                                  Page 10
<PAGE>

OTHER REVENUE

Other revenue includes training revenue ($9,000 decreased to $4,400), and 
consulting ($12,200 decreased to $9,100). The reduction in consulting revenue 
occurred due to a large consulting contract in the first six months of 1997 
which was concluded and no similar consulting arrangement occurred in the 
first six months of 1998.  Other revenue also includes sales from the 
Information Exchange L.L.C., a voice messaging subsidiary which (decreased 
from $27,200 to $27,100).  The Information Exchange L.L.C. was acquired in a 
stock transaction in late 1996. IP Telephony also generated $400 in revenue 
for the three months ended June 30.1998, this service was not available in 
1997. 

GROSS PROFIT

Gross profit consists of total revenue less the cost of delivering services 
and equipment.  The gross profit from Internet access and services was 63% of 
revenues from that segment for the three months ended June 30, 1997 and 69% 
for the same period in 1998. Gross profits on equipment sales decreased to 
19% for three months ended June 30, 1997 from 22% for the same period in 
1998.  Sale of equipment is provided as an accommodation to the Company's 
customers and the gross profit margin may vary considerably based on the mix 
of products sold.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative expenses ("S G & A") increased from 
approximately $1,909,000 in the second quarter of 1997 to approximately 
$2,023,800 in the second quarter of 1998 or an increase of 6%.

Payroll costs and benefits decreased 8% from $1,084,300 to $998,600 for the 
three months periods ended June 30, 1997 and 1998, respectively. 

Sales and marketing expenses, consisting of advertising, promotion, 
attendance at trade shows, printing, and finders fees, decreased from $81,600 
for three months ending June 30, 1997 to $31,900 for the same period in 1998, 
for a decrease of 61%. 

Facilities rent expense decreased by 6% from $115,600 to $109,100 for the 
second quarter of 1997 to the second quarter 1998.  The Company has 
headquarters in downtown Denver, Colorado with additional office facilities 
in Colorado Springs, Colorado.

The Company experienced a decrease in communications expense from $72,900 for 
the quarter ended June 30, 1997 to $60,100 for the quarter ended June 30, 
1998, or a decrease of 18%.  These expenses included local telephone service, 
cellular phones and pager costs and long distance telephone expenses.  The 
Company uses multiple "800" phone numbers to provide technical support, 
customer support, and sales order processing to its growing base of customers.

Legal and accounting expenses increased from $51,400 in the second quarter of 
1997 to $163,400 in the second quarter of 1998 or an increase of 218%.  This 
increase resulted from legal work in the preparation of a registration 
statement on Form S-1 which is discussed elsewhere in this document, legal 
expense incurred in relation to the lawsuit referenced in Part II, Item 1 of 
this document, and work performed in connection with acquisitions.

Outside services, which includes temporary to hire staff and professional 
services increased 51% from $97,000 to $147,000 from the second quarter of 
1997 to the same period in 1998.  The Company hires many of the technical 
support call center staff and the Web production staff on a "temp to hire" 
program wherein the new employee remains on the temporary employment agency's 
payroll for approximately ninety days.  This allows the staff to be fully 
evaluated prior to becoming a full time Company employee.

                                  Page 11
<PAGE>

SIX MONTHS ENDED JUNE 30, 1997 AND 1998

The Company's revenues grew 38% from $2,849,400 to $3,941,000 for the six 
months ended June 30, 1998 as compared to the comparable period in 1997. 
Revenue growth performance is attributable to increasing size of the sales 
force and segmenting the sales team by product group. 

Dial-Up Service

Revenues increased from $1,166,700 to $1,258,200 or 8% from the six months 
ending June 30, 1997 to the six months ending June 30, 1998. Dial-up customer 
count increased from 10,300 to 13,600 or 32% from the six months ending June 
30, 1997 to the six months ending June 30, 1998. As a result of the 
re-structure of the dial-up product, the Company experienced a reduction in 
revenue growth while making greater gains in its customer base.

Dedicated Access Service

The Company assigned a direct sales team for dedicated access service and 
with that focus has received the benefit of higher revenue growth. As a 
result, dedicated access service business has grown based principally on ISDN 
and High Speed circuit growth.  ISDN sales have grown from $258,200 to 
$435,400 from the first half of 1997 to the first half of 1998 for an 
increase of 69%, while sales of high speed circuits services have increased 
from $387,000 to $717,000 for the same periods for an increase of 85%.

Web Services

Web site hosting accounted for $218,300 of revenue in the six months ending 
June 30 1997 and $298,800 for the same period in 1998 for an increase of 37%. 
The increase resulted from increases in the direct sales force, increased 
server capacities and speed, and the increasing popularity of the web as a 
business tool.

Web site production increased from $249,600 to $330,400 or 32% for the first 
six months of 1997 as compared to the same period in 1998.  The growth in web 
hosting business plus the activities of the Company's direct sales force 
helped to drive this part of the business.

Other Services

Other revenue includes training revenue ($16,900 decreased to $9,000), 
consulting ($121,500 decreased to $13,300) and sales from the Information 
Exchange L.L.C. ($64,000 decreased to $53,400). IP Telephony generated $400 
in revenue for the six months ended June 30, 1998; this service was not 
available in 1997. 

                                  Page 12
<PAGE>

Gross Profit

Gross profit consists of total revenue less the cost of delivering services 
and equipment.  The gross profit (exclusive of equipment sales) was 65% for 
the six months ended June 30, 1997 and 67% for the same period in 1998.  
Gross profits on equipment sales were 21% and 22% for the six months ending 
June 30, 1997 and 1998, respectively.  Sale of equipment is provided as an 
accommodation to the Company's customers.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses ("S G & A") increased from 
$3,618,000 in the six months ended 1997 to $4,478,200 in the six months ended 
1998 or 23%.  Exclusive of option compensation expense, discussed in the 
following paragraph, S G & A increased 13% from the six months ended 1997 to 
the six months ended 1998.  Significant items are discussed below.

Payroll costs and benefits increased 21% from $2,042,200 to $2,464,400 for 
the six months ended 1997 and 1998, respectively.  Payroll costs included a 
non-cash charge to compensation for the first quarter of 1998 in the amount 
of $383,100 for the exercise of employee stock options.  Exclusive of this 
amount, payroll costs and related benefits increased 2%.

Sales and marketing expenses, consisting of advertising, promotion, 
attendance at trade shows, printing, and finders fees, decreased from 
$129,300 for the six months ending 1997 to $81,200 for the same period in 
1998 for a decrease of 37%.

Facilities rent expense decreased by 1% from $225,200 to $222,000 for the six 
months ended 1997 to the six months ended 1998.  The Company has headquarters 
in downtown Denver, Colorado with additional office facilities in Colorado 
Springs, Colorado.

The Company experienced a decrease in communications expenses from $147,100 
for the six months ended 1997 to $121,300 for the six months ended 1998 or 
18%. These expenses included local telephone service, cellular phones and 
pager costs and long distance telephone expenses.  The Company uses multiple 
"800" phone numbers to provide technical support, customer support, and sales 
order processing to its growing base of customers.

Legal and accounting expenses increased from $120,000 in the six months ended 
1997 to $380,200 in the six months ended 1998 or an increase of 217%.  This 
increase resulted from legal and accounting work required in preparation of 
the Company's proxy statement for the Shareholder meeting held on March 12, 
1998, legal work in the preparation of a registration statement on Form S-1, 
which is discussed elsewhere in this document, legal expense incurred in 
relation to the lawsuit referenced in Part II, Item 1 of this document, and 
due diligence work performed in regards to potential acquisitions.

Other outside services, which includes temporary to hire staff and 
professional services, decreased 20% from $195,600 to $235,000 from the six 
months ended 1997 to the same period in 1998.  The Company hires many of the 
technical support call center staff and the Web production staff on a "temp 
to hire" program wherein the new employee remains on the temporary employment 
agency's payroll for approximately ninety days.  This allows the staff to be 
fully evaluated prior to becoming a full time Company employee.

                                  Page 13
<PAGE>

Liquidity and Capital Resources

In addition to the October 1, 1997 investment of $2,398,600 by Mr. Hanson, he 
invested an additional $503,600 in March 1998 by exercising purchased 
warrants and options that were granted in October 1997, at the time of his 
initial investment.

The company currently intends, subject to market and other conditions, 
including the prior consummation of the ICC Acquisition, to complete a 
Private Placement Offering to raise approximately $175.0 million in a private 
placement of high yield securities pursuant to Rule 144A.  The securities to 
be offered in the Private Placement Offering will consist of senior notes 
(and may include other securities) and will not be registered under the 
Securities Act of 1933 or applicable state securities laws.  The Private 
Placement Offering will be made only by means of an offering memorandum.  The 
Issuer has obtained a bridge loan commitment from lenders to fund the ICC 
Acquisition if the Private Placement Offering is not completed. 

On July 20, 1998 and July 24,1998, the Company filed with the U.S. Securities 
and Exchange Commission separate amendments to a registration statement on 
Form S-1 (originally filed on May 15,1998) in order to register the shares 
underlying the warrants issued during the Company's initial public offering 
on September 5, 1996 along with other securities which the company has 
committed to register under various agreements.  The Warrants are currently 
traded on the Nasdaq SmallCap Market under the symbol "RMIIW."  Upon the 
effectiveness of this registration statement, and related "Blue Sky" filings 
with various states, the Company will have the right to call 1,365,000 
warrants for $0.25 each, and the warrant holder will have a thirty day period 
to exercise the warrant at a price of $3.07 per underlying share.  1,942,336 
common shares are underlying the warrants.  If all of the shares underlying 
these Warrants are exercised, the Company would realize proceeds of 
approximately $5,670,000. The Company has not announced plans to call these 
Warrants, but may elect to do so upon the completion of the registration 
statement and as funds are needed.

The Company has received a loan commitment from Phoenix Leasing Incorporated 
wherein the Company will have available a financing line available for 
acquisition of fixed assets in the amount of $352,000 to be used in four 
increments of $88,000.  The financing will be secured by the assets purchased 
and by an Equipment Loan Bond provided by Amwest Surety Insurance Company.  
The Company has submitted the appropriate paperwork to draw 3 of the funding 
increments. Funding is expected by August 30, 1998.

RMI is an Internet Service Provider ("ISP") with a high growth rate (as 
discussed elsewhere in this document).  The Company's growth is dependent on 
continuing to build a strong infrastructure and hiring quality sales, 
technical, and administrative personnel.  In order to build the 
infrastructure and acquire the human resources needed to maintain a high 
growth rate, the Company has operated with a negative cash flow from 
operations during 1996 and 1997.  The Company's cash requirements are 
relatively fixed for the near term and the Company expects to continue to 
improve operating cash flow if revenue continues to increase according to 
expectations without any significant cost increases. Should revenues not 
continue to increase according to expectations, the Company may have to seek 
additional financing to fund operating losses or implement reductions in 
operating expenses.  Reductions in operating expenses, if effected, could 
adversely affect revenues and therefore not result in the expected increase 
in cash flow.  The Company does not currently have access to additional bank 
financing and therefore should the Company not conclude its private placement 
offering of $175 million, financing would have to result from 
additional issuances of equity or debt securities.

                                  Page 14
<PAGE>

PART II.  OTHER INFORMATION


ITEM 2.   CHANGES IN SECURITIES

The Company filed a Form S-1 Registration Statement with the U.S. Securities 
and Exchange Commission on May 15, 1998 and amended the filing on July 20 and 
July 24, 1998, requesting the registration of Common Stock underlying the 
warrants issued during the Initial Public Offering of September 5, 1996 along 
with other securities for which the Company has committed to register under 
various agreements.  The warrants are currently traded on the Nasdaq stock 
exchange under the symbol "RMIIW".  Upon the successful completion of this 
registration, the Company will have the right to call 1,365,000 warrants for 
redemption for $0.25 each, and the warrant holder will have a thirty day 
period to exercise the warrant at an exercise price of $3.07 per underlying 
share.  1,942,336 common shares are underlying the warrants.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

A Stockholder Meeting was held on March 12, 1998, for the following purposes:

     1.   To elect five members to the Board of Directors to serve for the
          ensuing year and until their successors are duly elected and
          qualified;
     2.   To approve the Rocky Mountain Internet, Inc. 1997 Stock Option Plan;
     3.   To approve the Rocky Mountain Internet, Inc. 1998 Employees' Stock
          Option Plan;
     4.   To approve the Rocky Mountain Internet, Inc. 1998 Non-Employee
          Directors Stock Option Plan;
     5.   To approve an amendment to the Company's Certificate of Incorporation
          to increase the number of authorized shares of the Company's common
          stock from 10,000,000 to 25,000,000;
     6.   To approve an amendment to the Company's Certificate of Incorporation
          to decrease the number of votes required for action on a matter by the
          stockholders of the Company at a meeting thereof from a majority of
          the shares of common stock outstanding to a majority of the shares
          present in person or represented by proxy at a meeting and entitled to
          vote on the matter;
     7.   To approve an amendment to the Company's Certificate of Incorporation
          to implement a reverse split of the Company's Common Stock of up to
          one-for-ten, in the event the Board of Directors determines that a
          reverse stock split is desirable at any time within one year from the
          date of the March 12, 1998 meeting, with the exact size of the reverse
          stock split to be determined by the Board of Directors; 
     8.   To consider and act upon a proposal to ratify the appointment of
          Baird, Kurtz & Dobson, Certified Public Accountants, as the Company's
          independent public accountants for the fiscal years ending December
          31, 1997 and 1998.

All of the persons who were nominated to become directors of the Company were 
elected, and all of the above listed proposals were approved by the 
stockholders.  Please reference the Definitive Proxy Statement as filed with 
the Securities and Exchange Commission Schedule 14A on February 13, 1998 for 
additional information.

                                  Page 15
<PAGE>

ITEM 3. EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits

     Number    Description of Exhibits

     3.1       Certificate of Incorporation (1)
     3.2       Bylaws of Rocky Mountain Internet, Inc. (1)
     3.3       Certificate of Amendment of Certificate of Incorporation of Rocky
               Mountain Internet, Inc. (13)
     4.1       Form of Warrant Agreement dated September 5,1996 between Rocky
               Mountain Internet, Inc. and American Securities Transfer, Inc.
               (1)
     4.2       Form of Subordinated Convertible Promissory Note (1)
     4.3       Form of Lock-Up Agreement for Shareholders (1)
     4.4       Form of Lock-Up Agreement for Preferred Stockholders (1)
     4.5       Form of Lock-Up Agreement for Debenture Holders (1)
     4.6       Form of Stock Certificate (1)
     4.7       Form of Warrant Certificate (1)
     4.8       Warrant Agreement between Rocky Mountain Internet, Inc. and
               Douglas H. Hanson dated October 1, 1997 (8)
     4.9       1996 Employees' Stock Option Plan(6)
     4.10      1996 Non-Employee Directors' Stock Option Plan (6)
     4.11      Rocky Mountain Internet Inc. 1997 Non-Qualified Stock Option Plan
               (7)
     4.12      1997 Stock Option Plan (9)
     4.12.1    First Amendment to Non-Qualified Stock Option Agreement pursuant
               to the Rocky Mountain Internet, Inc. 1997 Stock Option Plan  (13)
     4.12.2    First Amendment to Incentive Stock Option Agreement pursuant to
               the Rocky Mountain Internet, Inc. 1997 Stock Option Plan (13)
     4.13      Rocky Mountain Internet, Inc. 1998 Employees' Stock Option Plan
               (10)
     4.14      Rocky Mountain Internet, Inc. 1998 Non-Employee Directors' Stock
               Option Plan (11)
     10.1      Agreement of Lease between Denver-Stellar Associates Limited
               Partnership, Landlord and Rocky Mountain Internet, Inc., Tenant
               (2) 
     10.2      Asset Purchase Agreement - Acquisition of CompuNerd, Inc. (2)
     10.3      Confirmation of $2.0 million lease line of credit (2)
     10.4      Agreement between MCI and Rocky Mountain Internet, Inc. governing
               the provision of professional information system development
               services for the design and development of the MCI internal
               Intranet project referred to as Electronic Advice. (2)
     10.5      Sublease Agreement-February 26, 1997-1800 Glenarm, Denver, Co.(4)
     10.6      Acquisition of The Information Exchange (4)
     10.7      Asset purchase of On-Line Network Enterprises (4)
     10.8      1996 Incentive Compensation Plan - Annual Bonus Incentive  (4) 
     10.9      1997 Incentive Compensation Plan - Annual Bonus Incentive  (4)
     10.10     TERMINATION AGREEMENT of joint venture between Rocky Mountain
               Internet, Inc. and Zero Error Networks, Inc. (5)
     10.11     Private Placement Memorandum (5)
     10.12     Carrier Services Switchless Agreement Between Frontier
               Communications of the West, Inc. and Rocky Mountain Broadband,
               Inc. (12)
     10.13     Wholesale Usage Agreement Between PSINet Inc. and Rocky Mountain
               Internet, Inc. (12)
     10.14     PacNetReseller Agreement (12)
     10.16     Operating Agreement of the Mountain Area Exchange LLC (12)       
     16.1      Letter re: change in certifying accountant  (3)
     27.1      Financial Data Schedule

                                  Page 16
<PAGE>

     (1)       Incorporated by reference from the Company's registration
               statement on Form SB-2 filed with the Commission on August 30,
               1996, registration number 333-05040C.
     (2)       Incorporated by reference from the Company's Quarterly Report on
               Form 10-QSB filing dated September 30, 1996.
     (3)       Incorporated by reference to the Company's Current Report on Form
               8-K filing dated January 28, 1997
     (4)       Incorporated by reference to the Company's Annual Report on Form
               10-KSB dated December 31, 1996.
     (5)       Incorporated by reference to the Company's Quarterly Report on
               Form 10-QSB dated June 30, 1997.
     (6)       Incorporated by reference to the Company's documents filed with
               Initial Public Offering.
     (7)       Incorporated by reference to the Company's Form S-8 Registration
               Statement filed on September 26, 1997.
     (8)       Incorporated by reference to the Company's Current Report on Form
               8-K dated October 6, 1997.
     (9)       Incorporated by reference to the Definitive Proxy Statement
               (Appendix A) filed on Schedule 14A on February 13, 1998.
     (10)      Incorporated by reference to the Definitive Proxy Statement
               (Appendix B) filed on Schedule 14A on February 13, 1998.
     (11)      Incorporated by reference to the Definitive Proxy Statement
               (Appendix C) filed on Schedule 14A on February 13, 1998.
     (12)      Incorporated by reference to the Company's Form S-1 filed on May
               15, 1998.
     (13)      Incorporated by reference to the Company's Form 10-KSB filed on
               March 31, 1998.
     (14)      Incorporated by reference to the Company's Form 10-KSB filed on
               March 31, 1998, filed as amended on June 1, 1998
     
     
(b)  Reports on 8-K.  State whether any reports on Form 8-K were filed during
     the last quarter of the period covered by this report, listing the items
     reported, any financial statements filed and the dates of such reports.

     Form 8-K; Item 2: Acquisition or Disposition of Assets was filed on June
     11,1998. Infohiway acquired effective June 5,1998, and has become a wholly
     owned subsidiary.
     
     Form 8-K; Item 2: Acquisition and Dispositions of Assets was filed on July
     14,1998. Applications Methods was acquired effectively July 1, 1998, and
     has become a wholly owned subsidiary.
     
                                  Page 17
<PAGE>

In accordance with the requirements of the Exchange Act, the registrant 
caused this report to be signed on its behalf by the undersigned, hereunto 
duly authorized.

     
                          /S/ Peter J. Kushar           August 14, 1998       
                          -------------------------     ----------------
                          Peter J. Kushar                     Date
                          Chief Financial Officer
     
     
                          /S/ Douglas H. Hanson         August 14, 1998       
                          -------------------------     ----------------
                          Douglas H. Hanson                   Date
                          Chairman, Chief Executive 
                          Officer, and President

                                  Page 18