<PAGE>
                                       
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-Q


[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the quarterly period ended            March 31, 1999
                                       ------------------------------------

                                       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                      (I.R.S. Employer
 incorporation or organization)                     Identification No.)


        999 EIGHTEENTH STREET, SUITE 2201
                DENVER, COLORADO                         80202
---------------------------------------------------------------------------
    (Address of principal executive offices)           (Zip Code)

                                 (303) 672-0700
---------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                       N/A
---------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed 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 the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practicable date.

             Class                     Shares Outstanding as of May 7, 1998
---------------------------------------------------------------------------
 Common Stock, $0.001 par value                     10,216,622

<PAGE>
                                       
                CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

         This Quarterly Report on Form 10-Q and the information incorporated 
by reference may include "forward-looking statements" within the meaning of 
Section 27A of the Securities Act and Section 21E of the Exchange Act. In 
particular, your attention is directed to Part I, Item 2. Management's 
Discussion and Analysis of Financial Condition and Results of Operation and 
Part II, Item 1. Legal Proceedings. We intend the disclosure in these 
sections and throughout the Quarterly Report on Form 10-Q to be covered by 
the safe harbor provisions for forward-looking statements. All statements 
regarding our expected financial position and operating results, our business 
strategy, our financing plans and the outcome of any contingencies are 
forward-looking statements. These statements can sometimes be identified by 
our use of forward-looking words such as "may," "believe," "plan," "will," 
"anticipate," "estimate," "expect," "intend" and other phrases of similar 
meaning. Known and unknown risks, uncertainties and other factors could cause 
the actual results to differ materially from those contemplated by the 
statements. The forward-looking information is based on various factors and 
was derived using numerous assumptions.

         Although we believe that the expectations expressed in these 
forward-looking statements are reasonable, our expectations may not turn out 
to be correct. Actual results could be materially different from our 
expectations, including the following:

         -        we may lose subscribers or fail to grow our subscriber base;

         -        we may not successfully integrate new subscribers or assets 
                  obtained through acquisitions;

         -        we may fail to compete with existing and new competitors;

         -        we may not be able to sustain our current growth;

         -        we may not adequately respond to technological developments 
                  impacting the Internet;

         -        we may fail to identify and correct a significant Year 2000 
                  compliance problem and experience a major system failure;

         -        we may fail to settle outstanding litigation; and

         -        we may not be able to find needed financing.

This list is intended to identify some of the principal factors that could 
cause actual results to differ materially from those described in the 
forward-looking statements included elsewhere in this report. These factors 
are not intended to represent a complete list of all risks and uncertainties 
inherent in our business, and should be read in conjunction with the more 
detailed cautionary statements included in our Annual Report on Form 10-K for 
the fiscal year ended December 31, 1998 under the caption "Item 1. Business 
-- Risk Factors" and in our other SEC filings and our press releases.

                                       i

<PAGE>

                          PART I. FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS

                          ROCKY MOUNTAIN INTERNET, INC.

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                             Page
<S>                                                                          <C>
    Condensed Consolidated Balance Sheets as of March 31, 1999 and
       December 31, 1998                                                      1

    Condensed Consolidated Statements of Operations for the Quarters
       ended March 31, 1999 and 1998                                          2

    Condensed Consolidated Statements of Cash Flows for the Quarters
       ended March 31, 1999 and 1998                                          3

    Notes to Condensed Consolidated Financial Statements                      4
</TABLE>

                                       ii

<PAGE>

                          ROCKY MOUNTAIN INTERNET, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                              (Unaudited)                          
                                                                             March 31, 1999      December 31, 1998 
                                                                           ------------------    ------------------
<S>                                                                           <C>                   <C>            
ASSETS                                                                                                             
CURRENT ASSETS                                                                                                     
   Cash and cash equivalents                                                   $  4,039,152           $  5,729,346 
   Trade receivables, net of allowance for doubtful                                                                
     Accounts                                                                     2,318,173              1,598,479 
   Inventories                                                                      146,901                 56,440 
   Other                                                                            630,860                224,629 
                                                                           ------------------    ------------------
                  Total Current Assets                                            7,135,086              7,608,894 
                                                                           ------------------    ------------------
                                                                                                                   
PROPERTY AND EQUIPMENT, NET                                                       6,111,721              3,540,400 
GOODWILL, NET                                                                    16,789,835             13,101,814 
Other                                                                               488,955                430,693 
                                                                           ------------------    ------------------
     Total assets                                                              $ 30,525,597           $ 24,681,801 
                                                                           ------------------    ------------------
                                                                           ------------------    ------------------
                                                                                                                   
                      LIABILITIES AND STOCKHOLDERS' EQUITY                                                         
CURRENT LIABILITIES                                                                                                
   Accounts payable                                                            $  4,198,198           $  2,280,101 
   Current maturities of long-term debt and capital                               
     lease obligations                                                            1,543,454                915,211 
   Deferred revenue                                                                 776,766                513,167 
   Accrued payroll and related taxes                                                374,708                302,660 
   Accrued expenses                                                               1,588,631              1,611,242 
                                                                           ------------------    ------------------
                  Total Current Liabilities                                       8,481,757              5,622,381 
                                                                           ------------------    ------------------
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS                                      2,818,050                493,963 
                                                                           ------------------    ------------------
     Total liabilities                                                           11,299,807              6,116,344 
                                                                           ------------------    ------------------
REDEEMABLE, CONVERTIBLE PREFERRED STOCK:                                                                           
   Series B, $.001 par value; 9,600 shares authorized, 8,000 shares                                                
     issued and outstanding  (liquidation preference of $8,000,000), net          6,747,843              6,747,843 
                                                                                                                   
COMMITMENTS AND CONTINGENCIES                                                                                      
                                                                                                                   
STOCKHOLDERS' EQUITY                                                                                               
   Common stock, $.001 par value; 25,000,000 shares                                                                
     authorized,  9,667,696 and 9,446,271 issued,                                                                  
     respectively, 9,593,494 and 9,384,677 outstanding, respectively                  9,999                  9,384 
   Additional paid-in capital                                                    33,204,319             29,257,415 
   Accumulated deficit                                                          (20,736,371)           (17,449,185)
                                                                           ------------------    ------------------
                                                                                 12,477,947             11,817,614 
                                                                           ------------------    ------------------
                                                                               $ 30,525,597           $ 24,681,801 
                                                                           ------------------    ------------------
                                                                           ------------------    ------------------

</TABLE>

                 See Notes to Consolidated Financial Statements

                                       1

<PAGE>

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

<TABLE>
<CAPTION>
                                                            Three Months Ended     
                                                                 March 31          
                                                           1999            1998    
                                                       ------------    ------------
<S>                                                    <C>              <C>        
REVENUE                                                                            
   Communication Services                              $ 4,407,010     $ 1,464,944 
   Web Solutions                                           855,990         314,341 
                                                       ------------    ------------
                                                         5,263,000       1,779,285 
                                                       ------------    ------------
Cost of revenue earned                                                             
   Communication Services                                2,547,887         504,662 
   Web Solutions                                             6,059         147,424 
                                                       ------------    ------------
                                                         2,553,946         652,086 
                                                       ------------    ------------
GROSS PROFIT                                             2,709,054       1,127,199 
                                                                                   
General, Selling, and Administrative Expenses            4,690,200       2,139,371 
Depreciation and Amortization                            1,143,103         239,972 
                                                       ------------    ------------
OPERATING LOSS                                          (3,124,249)     (1,252,144)
                                                       ------------    ------------
Other income (expense)                                                             
   Interest expense                                        (85,439)        (80,826)
   Interest income                                          22,500          18,620 
                                                       ------------    ------------
NET LOSS                                                (3,187,188)     (1,314,350)
                                                                                   
PREFERRED STOCK DIVIDENDS                                   99,000               - 
                                                                                   
Net loss applicable to common                                                      
  Stockholders                                         $(3,286,188)    $(1,314,350)
                                                       ------------    ------------
                                                       ------------    ------------
Basic and diluted loss per common share                $     (0.33)    $     (0.19)
                                                       ------------    ------------
                                                       ------------    ------------
Weighted average common shares outstanding               9,606,622       6,783,593 
                                                       ------------    ------------
                                                       ------------    ------------

</TABLE>

                 See Notes to Consolidated Financial Statements

                                       2

<PAGE>

                          ROCKY MOUNTAIN INTERNET, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  Three Months Ended      
                                                                                       March 31           
                                                                                      (Unaudited)   
                                                                                 1999            1998     
                                                                             ------------    ------------ 
<S>                                                                          <C>              <C>         
CASH FLOWS FROM OPERATING ACTIVITIES                                                                      
  Net loss                                                                   $(3,187,188)     $(1,314,350)
  Items not requiring cash:                                                                               
    Depreciation                                                                 172,748          184,893 
    Amortization                                                                 970,355           55,079 
     Loss on disposal of fixed assets                                                  -                - 
     Issuance of warrants for services related to unsuccessful merger                  -                - 
    Stock option compensation                                                          -          383,077 
    Stock contribution to pension plan                                            26,398           17,664 
  Changes in operating assets and liabilities net of effects from acquired                                
      interests:                                                                                          
    Trade receivables                                                            173,081           55,281 
    Inventories                                                                  (49,208)         (20,074)
    Other current assets                                                        (207,148)         (41,964)
    Accounts payable                                                           1,598,183          707,007 
    Deferred revenue                                                             112,706           (5,708)
    Accrued payroll and related taxes                                             55,265           10,593 
    Accrued expenses                                                            (177,416)        (138,097)
                                                                             ------------    ------------ 
        Net cash used in operating activities                                   (512,287)        (106,599)
                                                                             ------------    ------------ 
                                                                                                          
CASH FLOWS FROM INVESTING ACTIVITIES                                                                      
  Purchases of property and equipment                                         (1,232,368)        (129,268)
                                                                             ------------    ------------ 
  Proceeds from investments                                                            -           (3,000)
  Purchase of interests, net of cash acquired                                          -                - 
  Increase in deferred acquisition costs                                          11,950                - 
                                                                             ------------    ------------ 
        Net cash used in                                                                                  
        investing activities                                                  (1,220,418)        (132,268)
                                                                             ------------    ------------ 
                                                                                                          
CASH FLOWS FROM FINANCING ACTIVITIES                                                                      
  Proceeds from sale of common stock and warrants                                528,313          511,115 
  Purchase of treasury stock                                                           -          (18,000)
  Payments on long-term debt and capital                                                                  
    lease obligations                                                           (364,486)        (155,017)
                                                                             ------------    ------------ 
        Net cash provided by financing activities                                 42,511          338,098 
                                                                             ------------    ------------ 
                                                                                                          
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              (1,690,194)          99,231 
                                                                                                          
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                   5,729,346        1,053,189 
                                                                             ------------    ------------ 
                                                                                                          
CASH AND CASH EQUIVALENTS, END OF YEAR                                       $ 4,039,152      $ 1,152,420 
                                                                             ------------    ------------ 
                                                                             ------------    ------------ 

</TABLE>

                 See Notes to Consolidated Financial Statements

                                       3

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1   BASIS OF PRESENTATION

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.

RECLASSIFICATIONS

Certain prior year balances have been reclassified to conform to the current 
year presentation.

NOTE 2   NET LOSS PER SHARE

The Company follows the provisions of SFAS No. 128, "Earnings Per Share." 
SFAS No. 128 provides for the calculation of "Basic" and "Diluted" earnings 
per share. Basic loss per share includes no dilution and is computed by 
dividing income available to common stockholders by the weighted average 
number of common shares outstanding for the period. Diluted loss per share 
reflects the potential dilution of securities that could share in the 
earnings of an entity. As all of the Company's stock options and warrants are 
antidilutive, basic and diluted loss per share is the same for all periods 
presented herein.

NOTE 3  COMPREHENSIVE INCOME

As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting 
Comprehensive Income," which establishes standards for the reporting and 
display of comprehensive income and its components in the financial 
statements. The Company does not report any items, which would qualify for 
disclosure under this statement.

NOTE 4 ACQUISITIONS

On February 2, 1999, the Company acquired all of the outstanding common stock 
of the August 5th Corporation, d/b/a Dave's World, an Illinois corporation 
headquartered in Bloomington, Illinois ("Dave's World"), pursuant to which 
Dave's World merged with and into the Company. Pursuant to the terms of the 
Merger Agreement, the Company provided the shareholders of Dave's World, in 
the aggregate, approximately $3,000,000,payable in 214,286 shares of Common 
Stock of the Company.

                                       4

<PAGE>

On February 5, 1999, the Company acquired substantially all of the assets of 
ImageWare Technologies, L.L.C., an Alabama limited liability company 
("ImageWare"), and Communication Network Services, L.L.C., an Alabama limited 
liability company ("CNS"), pursuant to the terms of an Asset Purchase 
Agreement. Imageware and CNS were interrelated telecommunications services 
companies, which provided long-distance and local telecommunications services 
as well as telemarketing services. The Company purchased the assets of the 
two related companies for approximately $565,000, payable in the form of 
approximately 43,000 shares of restricted Common Stock of the Company, and 
assumed certain liabilities of the related companies.

Substantially all the purchase prices of the acquisitions was recorded as 
goodwill.

NOTE 5 SEGMENT INFORMATION

The Company's management regularly evaluates the performance of the Company 
by reviewing operating results comprising two segments of the business. As 
such, the Company considers each division to be an operating segment. In 
making operating decisions and allocating resources, the Company's management 
specifically focuses on the revenues and operating costs generated by each 
operating segment, as summarized in the following tables. Certain shared 
costs of the segments have been allocated to each segment based upon its 
share of the consolidated revenues for the period reported.

<TABLE>
<CAPTION>
                                               Three Months Ended      
                                                    March 31           
                                           (Unaudited)                 
                                              1999            1998     
                                          ------------    ------------ 
<S>                                       <C>              <C>         
NET SALES                                                              
Communication Services                    $ 4,407,010      $ 1,464,944 
Web Solutions                                 855,990          314,341 
                                          ------------    ------------ 
Total Net Sales                             5,263,000        1,779,285 
                                          ------------    ------------ 
COST OF GOODS SOLD                                                     
Communication Services                      2,547,887          504,662 
Web Solutions                                   6,059          147,424 
                                          ------------    ------------ 
Total COGS                                  2,553,946          652,086 
                                          ------------    ------------ 
SG&A                                                                   
Communication Services                      3,448,209        1,760,702 
Web Solutions                               1,291,991          378,669 
                                          ------------    ------------ 
Total SG&A                                  4,690,200        2,139,371 
                                          ------------    ------------ 
Operating Income (Loss) Before                                         
   Depreciation and Amortization                                       
Communication Services                     (1,589,086)        (800,420)
Web Solutions                                (442,060)        (211,752)
                                          ------------    ------------ 
Total Operating Income (Loss)              (2,031,146)      (1,012,172)
                                          ------------    ------------ 

</TABLE>

                                       5

<PAGE>

NOTE 6 SUBSEQUENT EVENTS

On May 6, 1999 the Company exercised its option to call warrants that were 
issued in its 1996 public offering (the "IPO Warrants"). The Company 
anticipates that the call notice will result in: 1) the exercise of 
substantially all remaining IPO Warrants within 30 days and 2) the issuance 
of up to 1,479,000 shares of the Company's common stock for net proceeds of 
up to $4,314,000.

On April 26, 1999, the Company announced that it will officially change the 
name of the Company from Rocky Mountain Internet, Inc. to "RMI.NET," subject 
to stockholder approval at the 1999 Annual Meeting of Stockholders.

NOTE 7 COMMITMENTS AND CONTINGENCIES

In June 1998, the Company announced it had entered into a merger agreement to 
acquire Internet Communications Corporation ("ICC"). The closing of the 
acquisition was subject to various closing conditions, and the merger 
agreement contained certain rights of termination. On October 13, 1998, the 
Company announced that it had terminated the merger agreement due to, among 
other things, ICC's failure to satisfy certain obligations under the merger 
agreement. On October 14, 1998, ICC filed a complaint against the Company in 
Denver District Court claiming $30 million in damages and alleging, among 
other things, that the Company had breached the merger agreement and had made 
certain misrepresentations to ICC with respect to the merger transaction. The 
Company believes ICC's claims to be without merit and intends to vigorously 
defend such action and to assert counterclaims against ICC; however, there 
can be no assurance that the Company will prevail in it's defense or 
counterclaims.

On November 30, 1998, the Company filed an Answer to the ICC Complaint 
denying their material allegations, asserting a number of affirmative 
defenses, and disputing their right to any recovery from the Company on any 
of the claims asserted. In addition, the Company filed a counterclaim against 
ICC seeking over $175 million in damages for injuries suffered by the Company 
as a result of ICC's wrongful acts that led to the failure of the proposed 
high yield debt offering in 1998 and the failure of the proposed merger 
agreement with ICC.

On February 24, 1999, the Denver District Court granted the motion filed by 
the company, and disqualified the law firm of Holme Roberts & Owen, LLP (HRO) 
from continuing to act as litigation counsel for ICC in the lawsuit. The 
Court agreed with the Company that because HRO had acted as transaction 
counsel for ICC in the high yield debt offering and the proposed merger, and 
therefore was a potential material witness and material actor in the 
underlying activities, it would be inappropriate for HRO to seek to act as 
trial counsel in the same proceeding where it might be required to serve as a 
witness or potentially be drawn into the proceedings in some other way.

The Company is hopeful that it can resolve the dispute with ICC without the 
necessity for a trial; however, there can be no assurance as to the Company's 
ability in this regard. In the event that the dispute cannot be resolved 
expeditiously, the Company expects that it would incur additional costs and 
expenses as a result of the litigation and that the litigation may hamper the 
Company's ability to obtain additional. As a result of the termination and 
the related financing transactions, which were not completed, the Company 
incurred cost, expenses and related fees between $6.1 million, a portion of 
which are in dispute. Of this amount, approximately $4.2 million relates to a 
non-cash item related to warrants issued by the Company. Of the $6.1 million 
expensed, $0.8 million remained accrued at March 31, 1999 related to this 
matter. At this time, management of the Company is unable to determine the 
possible outcome of this dispute.

                                       6

<PAGE>

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

         The following discussion of the results of operations and financial 
condition of Rocky Mountain Internet, Inc. (the "Company") should be read in 
conjunction with the Company's Consolidated Financial Statements and the 
Notes thereto included elsewhere in this Quarterly Report.

RESULTS OF OPERATIONS

              THREE MONTHS ENDED MARCH 31, 1999 AND MARCH 31, 1998

         TOTAL REVENUE

         The Company's total revenues grew 196% from $1,779,000 to $5,263,000 
for the three months ended March 31, 1999 from March 31, 1998. Revenue growth 
performance is attributable to an increase in the number of the Company's 
subscribers as a result of more aggressive sales efforts and subscribers 
added by acquisition. The Company intensified its sales efforts in 1999 
versus 1998 by increasing the size of the sales force and by segmenting the 
sales team by product group.

         COMMUNICATION SERVICES

         Communication Services is comprised predominately of dial-up and 
dedicated Internet access service. Communication Services revenues grew 201% 
from $1,465,000 to $4,407,000 for the three months ended March 31, 1999 from 
March 31, 1998. The increase is due to increasing demand for a wide range of 
bandwidth options to connect customers to the Internet and the headcount 
growth of the Company's sales department in the second half of 1998. In 
addition, the Company added over 17,000 dial-up and 700 dedicated access 
customers due to acquisitions in the fourth quarter of 1998 and the first 
quarter of 1999.

         WEB SOLUTIONS

         Web Solutions revenues grew 172% from $314,000 for the three months 
ended March 31, 1998 to $856,000 for the three months ended March 31, 1999. 
Web Solutions revenues are comprised of three major products: web site 
hosting, web site production and web site marketing. Web site hosting 
accounted for $139,000 of revenue in the first quarter of 1998 and $281,000 
in the first quarter of 1999 for an increase of 102% due to an increase in 
the number of hosted web sites as a result of the addition of sales 
personnel. Web site production increased from $145,000 in the first quarter 
of 1998 to $565,000 in the first quarter of 1999, for an increase of 290%. 
The increase in web site production is primarily due to the acquisition of 
Application Methods in July 1998.

         GROSS PROFIT

         Gross profit consists of total revenue less the direct cost of 
delivering services and equipment. These costs include costs for circuit and 
local line charges to provide service to customers. Gross margin for the 
first quarter of 1999 was $2.7 million, or 51% of revenue, compared to $1.1 
million, or 63% of revenue for the first quarter of 1998. The lower gross 
margin ratio was due primarily to lower margins of two recent acquisitions, 
DataXchange and CNS. Although the underlying cost structure for these 
acquisitions is being improved to restore the Company to higher margins, 
traditional telecom services historically generate lower gross margins than 
the Company's other Communication Services operations. The Company plans to 
transition these local and long distance telecom customers to dial-up 
Internet subscribers over the next three quarters, which may help restore 
margins to historical levels.

         SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

         Total selling, general, and administrative expenses ("SG&A") 
increased from approximately $2,139,000 for the three months ended March

                                       7

<PAGE>

31, 1998 to $4,690,000 for the three months ended March 31, 1999, or an 
increase of 119%. This increase was partially the result of higher payroll 
costs and benefits. Payroll and benefits cost increased 92% from $1,466,000 
in the first quarter of 1998 to $2,812,000 in the first quarter of 1999 as a 
result of increasing the Company's headcount from approximately 80 employees 
in March 1998 to approximately 290 employees in March 1999. Outside services, 
which includes "temporary to hire" staff and professional services increased 
95% from $305,000 in the first quarter of 1998 to $594,000 in the first 
quarter of 1999. 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.

         DEPRECIATION AND AMORTIZATION

         Depreciation and amortization increased from $240,000 for the three 
months ended March 31, 1998 to $1,143,000 for the three months ended March 
31, 1999 for an increase of 376%. The increase was due to higher goodwill 
amortization associated with six companies that were acquired during the 
latter half of 1998.

EFFECTS OF INFLATION

         Historically, inflation has not had a material effect on the Company.

LIQUIDITY AND CAPITAL RESOURCES

         For the three months ended March 31, 1999, the Company's cash used 
in operations was $0.5 million as compared to $0.1 million for the three 
months ended March 31, 1998. The increase in cash used in operations 
primarily resulted from increased operating losses, partially offset by lower 
working capital requirements in 1999. The Company expects to continue to have 
operating cash flow deficiencies for the near future as it develops and 
expands its business.

         For the three months ended March 31, 1999, the Company used $1.2 
million in investing activities compared to $0.1 million for the same period 
in 1998. This change was primarily due to increased capital expenditures in 
1999.

         Cash provided by financing activities decreased in the three months 
ended March 31, 1999 compared to the same period in 1998 due to payments made 
in 1999 to extinguish debt.

         Since its inception, the Company has funded its operations and 
working capital needs primarily through the public and private placement of 
the Company's equity securities. In addition, a significant portion of the 
Company's capital expenditures has been financed through capital lease 
obligations payable to finance companies. The Company has also borrowed 
amounts from its Chief Executive Officer in order to fund working capital 
requirements.

         The Company also issued 8,000 shares of its Series B Redeemable, 
Convertible Preferred Stock ("Series B Preferred Stock") through a private 
placement, which was completed on December 10, 1998. The Company received $8 
million in gross proceeds from the issuance of the Series B Preferred Stock, 
which was sold to two institutional investors. The Series B Preferred Stock 
is convertible, subject to certain restrictions, into shares of the Company's 
common stock at a variable rate, based on a formula linked to the market 
price at the time of conversion. The terms of the Series B Preferred Stock 
also includes restrictions on conversion depending on certain market 
conditions, restrictions against short sales and other hedging transactions 
by the investors and a conversion rate which may be up to a 20% premium to 
the market price or a discount to the market price depending on the time of 
conversion. The Series B Preferred Stock may be redeemed by the Company at 
any time if the Company is in compliance with certain covenants at a minimum 
redemption price equal to 115% times the outstanding face amount plus accrued 
but unpaid dividends and interest. In addition, the Series B Preferred Stock 
may be redeemed at the option of the holders if the Company's common stock 
ceases to be traded on either the NASDAQ, NASDAQ Small Cap, NYSE or the AMEX 
stock exchanges, if the Company is

                                       8

<PAGE>

unable to convert the shares into common stock upon a requested conversion or 
if the Company is merged into another entity where the Company's voting 
stockholders do not collectively own greater than 51% of the merged entity.

         In addition, the Company issued warrants to purchase 155,000 shares 
of common stock with an exercise price equal to 130% of the closing day 
market price, exercisable at any time over the next five years, to the 
purchasers of the Series B Preferred Stock and warrants to purchase 100,000 
shares of common stock with an exercise price equal to 120% of the closing 
day market price, exercisable over the next five years, to certain brokers in 
connection with the transaction. The Company has agreed to register the 
common stock issuable upon conversion of the Series B Preferred Stock and the 
exercise of the warrants pursuant to registration rights agreements.

         The Company has cash and cash equivalents of $4.0 million as of 
March 31, 1999. Management estimates that, based upon its current 
expectations for growth, the Company will require additional funding of up to 
$20 million through the end of 1999 for the execution of its current business 
plan including the financing of its anticipated capital expenditures and 
operating losses. In addition to increasing cash flow from operations, the 
Company intends to obtain this funding from one or more of the following 
sources: (1) a commitment, subject to certain conditions, from one of the 
institutional investors who purchased the Series B Preferred Stock in 
December 1998 to purchase an additional $5 million of preferred stock with 
the same terms as the Series B Preferred Stock, (2) calling the remaining 
warrants that were initially issued in conjunction with the Company's 1996 
initial public offering on May 6, 1999, and could yield up to $4,314,000 in 
net proceeds, (3) the exercise of warrants related to the Company's September 
1997 private placement, and (4) establishing a credit facility to finance 
equipment purchased and other capital expenditures for $11.0 million. 
Management believes its current operating funds, along with these additional 
financing sources, will be sufficient to fund its cash requirements for at 
least the next 12 months.

         The Company issued warrants to its Chief Executive Officer to 
purchase 4,000,000 shares of the Company's common stock at an exercise price 
of $1.90 per share, subject to adjustment, in October 1997. These warrants 
are scheduled to expire on September 22, 1999 if not exercised earlier. The 
Chief Executive Officer exercised a portion of these warrants in March 1998 
to purchase 50,000 shares of the Company's common stock and in January 1999 
to purchase 25,000 shares of the Company's common stock.

         The sale of additional equity or convertible debt securities could 
result in additional dilution to the Company's stockholders. In addition, the 
Company will, from time to time, consider the acquisition of or investment in 
complementary businesses, products, services, and technologies, and the 
repurchase and retirement of debt, which might impact the Company's liquidity 
requirements or cause the Company to issue additional equity or debt 
securities. There can be no assurance that financing will be available in 
amounts or on terms acceptable to the Company, if at all. Should the Company 
be unsuccessful in its efforts to raise capital it may be required to modify 
or curtail its plans for growth.

YEAR 2000 ISSUES

         Rocky Mountain Internet is preparing its systems and applications 
for the Year 2000 (Y2K). Various problems may result from the improper 
processing of dates and date-sensitive calculations by computers and other 
machinery as the year 2000 is approached and reached. These problems arise 
from the fact that most of the world's computer hardware and software have 
historically used only two digits to identify the year in a date. If the 
computer systems cannot distinguish between the year 1900 and 2000, system 
failures or other computer errors could result.

         STATE OF READINESS

         The Company has established a Y2K Committee to coordinate 
appropriate activity and a reporting structure to the Board of Directors on a 
monthly basis with regard to the Year 2000 issue. This committee has outlined 
a comprehensive plan and is currently implementing the tasks associated for 
the Company to become Y2K ready. Preliminary indications are that, since 
Rocky Mountain

                                       9

<PAGE>

Internet is a relatively new Company (founded in 1993), most hardware and 
software systems, as well as software programs used by the Company, will not 
be impacted by the Year 2000 issues. All of the Company's MIS user equipment 
is based on Microsoft Windows 95, 98, or NT. Microsoft has issued or is 
issuing patches that will make this software compliant by year-end. Internal 
MIS systems that handle accounting and customer care are being replaced due 
to growth needs. All future software that will be purchased will be Y2K 
compliant. All internally written software is currently being checked to 
ensure Y2K compliance and will be completed no later than October 1999. Users 
have been briefed on the necessity for them to check any special, non-mission 
critical software that they have purchased for their departments to ensure 
that it is Y2K compliant.

         The Company has inventoried the externally purchased network 
elements including routers, router software, router redundancy options, 
processor cards, and switches. The Company has verified 100% completion of 
testing, in cooperation with the external vendors, that the products 
associated with the network elements are Y2K compliant. After testing and 
certification, the Company learned that 86% of the network elements passed 
the Y2K compliance test, while 14% failed. Of the 14% of elements that 
failed, and therefore were not Y2K compliant, the Company has upgraded all 
but one piece of equipment to be Year 2000 compliant. The remaining piece 
will be replaced no later than October 1999.

         Rocky Mountain Internet has acquired eight companies since June 
1998. The Company is currently working very closely with each company to 
determine their state of readiness. Overall, the companies are approximately 
85% Y2K compliant from a hardware and software perspective. The Company 
believes that the remaining 15% non-compliance is a result primarily of not 
yet being able to complete testing of those components.

         With respect to communications from external third parties 
requesting that the Company provide verification of Y2K compliance on the 
Company's goods and services, the Company expects to have formal response 
letters sent no later than May 15, 1999. With respect to communications with 
external third party vendors that provide additional goods and services to 
the Company, the Company expects to issue requests to all those parties to 
provide verification of Y2K compliance on their goods and services no later 
than May 15, 1999.

         Subsequent testing will indicate what modifications or replacements 
will be necessary for the Company to be internally Year 2000 ready.

         The Company is continuing to evaluate the financial impact for Y2K 
compliance and expects that total costs will not exceed $150,000 to $200,000. 
The estimates for the costs of the Year 2000 Program are based upon 
management's best estimates and may be updated or revised as additional 
information becomes available. The Company has incurred approximately $5,000 
thus far on administrative costs in connection with assessing the Year 2000 
issues. Due to the Company's headquarters and data center move during the 
first quarter of 1999, the Company estimates no more than $50,000 was spent 
for the data center move and to ensure non-Y2K compliant equipment was 
replaced with equipment that met Y2K standards. The Company is assessing 
whether or not they will hire an external consultant to assess the state of 
readiness of all systems, which could be affected by the Year 2000 issue. The 
Company believes such costs will not have a material effect on the Company's 
financial condition, liquidity or results of operation.

         RISK ASSESSMENT

         The failure by the Company to correct a material Year 2000 problem 
could result in an interruption in, or a failure of, certain normal business 
activities or operations. Presently, however, the Company perceives that its 
most likely worst case scenario related to the Year 2000 is associated with 
potential concerns with third party services or products. The Company is 
dependent on a significant number of third party vendors to provide network 
services and equipment. A significant Year 2000-related disruption of the 
network services or equipment provided to the Company by third party vendors 
could cause customers to consider seeking alternate providers or cause an 
unmanageable burden on

                                       10

<PAGE>

customer service and technical support, which in turn could materially and 
adversely affect the Company's results of operations, liquidity and financial 
condition. Although the Company believes that internal Y2K compliance will be 
achieved by December 31, 1999, there can be no assurance that the Y2K problem 
will not have a material adverse affect on the Company's business, financial 
condition and results of operations as a result of third party failures.

         CONTINGENCY PLANS

         Due to the current phase of the Company's Year 2000 analysis, the 
Company is currently unable to fully assess its risk and determine what 
contingency plans, if any, need to be implemented by the Company. The 
Company's primary concern, at this point, is with its third party 
communications providers. These service providers are conducting their own 
assessments of their Year 2000 readiness. The Company expects that these 
third party vendors will be Year 2000 ready. However, any failure by third 
party vendors to resolve Year 2000 issues on a timely basis or in a manner 
that is compatible with the Company's systems could have a material adverse 
effect on the Company. Preliminary indications are, however, that the 
Company's third-party providers are, or will be, Year 2000 compliant.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company does not have any derivative financial instruments as of 
March 31, 1999. The Company's interest income and expense are sensitive to 
changes in the general level of interest rates. In this regard, changes in 
interest rates can affect the interest earned on the Company's cash 
equivalents. The Company's long-term debt has fixed interest rates and the 
fair value of these instruments is affected by changes in market interest 
rates. To mitigate the impact of fluctuations in interest rates, the Company 
generally enters into fixed rate investing and borrowing arrangements. As a 
result, the Company believes that the market risk arising from holding of its 
financial instruments is not material.

                                       11

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         In June 1998, the Company announced it had entered into a merger 
agreement to acquire Internet Communications Corporation ("ICC"). The closing 
of the acquisition was subject to various closing conditions, and the merger 
agreement contained certain rights of termination. On October 13, 1998, the 
Company announced that it terminated the merger agreement due to, among other 
things, ICC's failure to satisfy certain obligations under the merger 
agreement. On October 14, 1998, ICC filed a complaint against the Company in 
Denver District Court claiming $30 million in damages and alleging, among 
other things, that the Company had breached the merger agreement and had made 
certain misrepresentations to ICC with respect to the merger transaction. The 
Company believes ICC's claims to be without merit and intends to vigorously 
defend such action and to assert counterclaims against ICC; however, there 
can be no assurance that the Company will prevail in it's defense or 
counterclaims.

On November 30, 1998, the Company filed an Answer to the ICC Complaint 
denying their material allegations, asserting a number of affirmative 
defenses, and disputing their right to any recovery from the Company on any 
of the claims asserted. In addition, the Company filed a counterclaim against 
ICC seeking over $175 in damages for injuries suffered by the Company as a 
result of ICC's wrongful acts that led to the failure of the proposed high 
yield debt offering in 1998 and the failure of the proposed merger agreement 
with ICC.

On February 24, 1999, the Denver District Court granted the motion filed by 
the company, and disqualified the law firm of Holme Roberts & Owen, LLP (HRO) 
from continuing to act as litigation counsel for ICC in the lawsuit. The 
Court agreed with the Company that because HRO had acted as transaction 
counsel for ICC in the high yield debt offering and the proposed merger, and 
therefore was a potential material witness and material actor in the 
underlying activities, it would be inappropriate for HRO to seek to act as 
trial counsel in the same proceeding where it might be required to serve as a 
witness or potentially be drawn into the proceedings in some other way.

         The Company is hopeful that it can resolve the dispute with ICC 
without the necessity for a trial; however, there can be no assurance as to 
the Company's ability in this regard. In the event that the dispute cannot be 
resolved expeditiously, the Company expects that it would incur additional 
costs and expenses as a result of the litigation and that the litigation may 
hamper the Company's ability to obtain additional. As a result of the 
termination and the related financing transactions, which were not completed, 
the Company incurred cost, expenses and related fees between $6.1 million, a 
portion of which are in dispute. Of this amount, approximately $4.2 million 
relates to a non-cash item related to warrants issued by the Company. Of the 
$6.1 million expensed, $0.8 million remained accrued at March 31, 1999 
related to this matter. At this time, management of the Company is unable to 
determine the possible outcome of this dispute.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         During the three months ended March 31, 1999, the Company issued 
and/or sold the following unregistered securities:

         -        On January 12, 1999, the Company issued 25,000 shares of 
                  common stock to Douglas H. Hanson for aggregate 
                  consideration of $47,500 upon Mr. Hanson's exercise of 
                  outstanding warrants;

         -        On February 5, 1999, the Company issued 42,578 shares 
                  (valued at $565,000) to acquire substantially all of the 
                  assets of Communication Network Services, Inc. and 
                  ImageWare Technologies;

                                       12

<PAGE>

         -        On February 25, 1999, the Company issued 73,125 shares of 
                  common stock to two accredited investors for aggregate 
                  consideration of $187,500 upon their exercise of 
                  outstanding warrants;

         -        On March 9, 1999, the Company issued 71,150 shares of 
                  common stock to two accredited investors for aggregate 
                  consideration of $218,430 upon their exercise of 
                  outstanding warrants.

Each of the above transactions was exempt from registration under Section 
4(2) of the Securities Act of 1933.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

(b)      Exhibits.

<TABLE>
<CAPTION>
       EXHIBIT
        NUMBER             DESCRIPTION OF DOCUMENT
       -------             -----------------------
<S>                        <C>
         27.1              Financial Data Schedule.
</TABLE>

(b)      Reports on Form 8-K.

<TABLE>
<S>               <C>
         1)       On February 17, 1999, the Company filed a Current Report on
                  Form 8-K to report the Company's acquisition of August 5th
                  Corporation, d/b/a Dave's World, an Illinois corporation, and
                  the Company's acquisition of substantially all of the assets
                  of ImageWare Technologies, L.L.C. and Communication Network
                  Technologies, L.L.C., two Alabama limited liability companies.

         2)       On January 8, 1999, the Company filed an amended Current
                  Report on Form 8-K (initially filed on December 22, 1998) to
                  report the Company's acquisition of substantially all of the
                  assets of DataXchange Network, Inc. and to provide financial
                  statements and pro forma financial information regarding the
                  acquisition.

         3)       On January 8, 1999, the Company filed a Current Report on Form
                  8-K to report the Company's private placement on December
                  19,1998 of Series B Convertible Preferred Stock for gross
                  proceeds of $8,000,000, before associated costs, fees and
                  expenses.
</TABLE>

                                       13

<PAGE>

                                   SIGNATURES

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

      Date:  May 14, 1999.

                                       
                                       ROCKY MOUNTAIN INTERNET, INC.
                                       a Delaware corporation


                                   By: /s/ Douglas H. Hanson
                                       -------------------------------
                                       Name:    Douglas H. Hanson
                                       Title:   Chairman of the Board, Chief   
                                                Executive Officer and Director 
                                                (PRINCIPAL EXECUTIVE OFFICER) 

                                   By: /s/ Peter J. Kushar
                                       -------------------------------
                                       Name:    Peter J. Kushar

                                       Title:   Chief Financial Officer       
                                                (PRINCIPAL FINANCIAL AND      
                                                ACCOUNTING OFFICER)

                                       14