UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549
                               FORM 10-QSB/A-1


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

For the quarterly period ended March 31, 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  April  15,  1998,  Rocky Mountain Internet, Inc. had 7,311,761 shares of
common stock, $.001 par value, outstanding.

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


<PAGE>


                             PRELIMINARY NOTE

This  amended  Quarterly  Report  on Form  10-QSB/A-1  amends  and  updates  the
information  contained in Part I, Item 2 of the Quarterly  Report on Form 10-QSB
filed on May 15, 1998 (the "Original Report") by Rocky Mountain  Internet,  Inc.
(the "Company").  The Original Report disclosed that on May 15, 1998, Douglas H.
Hanson  exercised  421,053  warrants to purchase  shares of common  stock of the
Company for an  aggregate  exercise  price of  $800,000,  which would enable the
Company to maintain  the  qualification  of its common  stock for trading on the
NASDAQ SmallCapTM Market. Upon further analysis, the Company has determined that
the  investment by Mr. Hanson was not necessary for the continued  qualification
of its  common  stock  for  trading  on the  NASDAQ  SmallCapTM  Market,  as the
Company's  market  capitalization  (i.e.,  number  of  shares  of  common  stock
outstanding  multiplied  by the market  price of those  shares) on that date far
exceeded   the  minimum   requirement   of   $35,000,000   for  such   continued
qualification. Accordingly, the Company and Mr. Hanson rescinded his exercise of
the warrants. Part I, Item 2 of this amended Quarterly Report on Form 10-QSB/A-1
amends the  Original  Report by (i)  eliminating  the  discussion  and pro forma
information in the Original  Report relating to the exercise of the warrants and
(ii) amending the disclosure  relating to the Company's projected cash needs for
1998.


PART I.  FINANCIAL INFORMATION

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
Company's  internal  hardware  and  software,  as well as third  party  computer


<PAGE>


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 also 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.


RECENT DEVELOPMENTS

The  Company  is  implementing  several  new  service  offerings  which  will be
generating revenues subsequent to the period covered by this Form 10-QSB.

NATIONAL INTERNET PROVIDER   Effective  March  11,  1998,  the  Company  entered
into an agreement with PSINet,  Inc., (refer to Exhibit 10.13:  PSINet Wholesale
Usage  Agreement)  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 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   The  Company filed an application in March,
1998  with the  Colorado  PUC to become a  Competitive  Local  Exchange  Carrier
("C-LEC"). A wholly owned subsidiary,  Rocky Mountain Broadband,  Inc., has been
formed for providing  these  services.  On April 22, 1998, The Public  Utilities
Commission  of the State of  Colorado  granted  the  request  by Rocky  Mountain
Broadband,  Inc. to become a C-LEC.  Refer to Exhibit 10.15:  "Order  Granting a
Certificate to Provide Local Exchange Telecommunications Services."


RISK FACTORS

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.



<PAGE>


TERMINATION OF THIRD PARTY AGREEMENT

The  Company  and Zero  Error  Networks  ("ZEN"),  a third  party with which the
Company had  contacted  as described  below under  "Dial-Up  Service,"  signed a
"TERMINATION  AGREEMENT"  effective  July 3, 1997,  which affects four points of
presence  (POP) located in Pueblo,  Hayden,  Leadville,  and Alamosa,  Colorado.
These POPs have been  operated  under a revenue  and  expense  sharing  contract
between the two parties. The Termination  Agreement calls for ZEN to operate the
Hayden, Leadville, and Alamosa, Colorado locations and receive the rights to the
customer  base  currently  existing in those  locations  while the Company  will
operate and maintain  the customer  base in Pueblo and  surrounding  areas.  The
transition occurred during the months of July, August, and December of 1997. The
Termination  Agreement  includes a limited  non-compete  clause wherein  neither
party may directly solicit the existing  customer base of the other for a period
of one  year.  The net  effect of the  Termination  Agreement  on net  income is
expected  to be neutral in the short run and have a positive  long term  result.
The Pueblo  revenues  are expected to grow at a faster rate than the other three
POP's  combined  and the  Company  plans to focus  additional  effort to selling
dedicated access in the Pueblo market.  However,  there can be no assurance that
the Company's  efforts will be  successful or that the long-term  effects of the
Termination Agreement on net income will be positive.


RESULTS OF OPERATIONS

Three Months Ended March 31, 1997 and 1998

The Company has a net loss  applicable  to common  shareholders  of $914,637 and
$1,314,350 for the first quarters of 1997 and 1998  respectively for an increase
in the loss of 58%. Based on earnings before interest, taxes, depreciation,  and
amortization  ("EBITDA")  the loss was $637,427 for the first quarter of 1997 as
compared to $993,552 for the first quarter of 1998.  During the first quarter of
1998,  the Company  recorded a non-cash  compensation  expense of  $383,077  for
employee  stock  options,   which  is  included  in  the  EBITDA  and  net  loss
calculations.  If this  non-cash  compensation  item is removed  from the EBITDA
calculation then the loss decreased by 4% from $637,427 for the first quarter of
1997 to $610,470 for the first quarter of 1998. The resulting loss per share for
these items are presented in the following schedule.

                                    First Quarter 1997     First Quarter 1998
Type of Loss                          Loss     Loss Per       Loss     Loss Per
                                                 Share                  Share
------------                      -----------  --------  ------------- --------

Net Loss                          $ (914,637)  $ (0.19)  $ (1,314,350) $ (0.19)
Net Loss adjusted for non-cash 
  compensation
                                  $ (914,637)  $ (0.19)  $   (931,273) $ (0.14)
EBITDA Loss                       $ (637,427)  $ (0.13)  $   (993,552) $ (0.15)
EBITDA Loss adjusted for 
  non-cash compensation           $ (637,427)  $ (0.13)  $   (610,475) $ (0.09)


<PAGE>


Effective  January 16, 1997, the Company  acquired  dial-up and dedicated access
subscribers from Online Network  Enterprises,  Inc. (ONE), a Boulder,  Colorado,
based provider of Internet access and Web services for consideration  consisting
of $150,000 of cash and 116,932 shares of the Company's common stock.

The  Company's  revenues grew 27% from  $1,397,283  to $1,779,285  for the three
months ended March 31, 1998 as compared to the comparable period in 1997. Listed
below is a breakdown of the revenue billing categories.

                                          Three Months Ended
                                               March 31

Revenue                                   1997         1998          %Change
-------                               ----------    ----------       -------

Dial-Up Service                       $  595,686    $  565,263          (5%)
Dedicated Access Service                 347,592       798,394         130%
Web Services                             216,472       314,341          45%
Equipment Sales                           83,244        54,969         (21%)
Other                                    153,963        35,318         (77%)
                                      ----------    ----------       ------

Total                                 $1,396,957    $1,779,285          27%


DIAL-UP SERVICE

The  Company's  strategy  is to provide an high  quality  service  with few busy
signals. In the past the Company was not prepared to offer flat rate pricing for
unlimited access service,  however, on November 4, 1997, the Company announced a
flat rate offering to the Denver,  Colorado and Boulder Colorado  markets.  This
offering has become more  economically  attractive than in the past due to lower
costs  for  circuits  and a lower  cost per port  for  dial up  access.  The new
offering includes higher speed modem access using K 56 Flex technology.

The table below  shows the  composite  weighted  average  billing  rate for full
service  Internet  access by quarter for 1995,  1996, and 1997. The reduction in
the  average  rate for  September  1997 is the result of a change in the average
rates  resulting from the  termination of Dial-Up  Service  contracts with third
parties in Alamosa  and  Leadville.  The  remaining  contracts  with other third
parties provide an higher percentage of lower rate services.  Effective with the
December 1997  billings,  most Denver and Boulder,  Colorado area  customers who
were on payment  plans over  $19.95 per month were  converted  to the new $19.95
flat rate service, resulting in a lower average billing rate. The full effect of
the  conversions  occurred during the last quarter of 1997 and the first quarter
of 1998.  The  Company  expects the  average  revenue  per  dial-up  customer to
stabilize contingent upon the current pricing remaining in effect.


<PAGE>


                          For the Three Months Ended

   Mar      Jun       Sep        Dec        Mar        Jun        Sep       Dec
  1995     1995      1995       1996       1996       1996       1996      1996
-------------------------------------------------------------------------------
$20.52   $20.42    $20.88     $21.02     $20.97     $20.33     $20.41    $20.50

   Mar      Jun       Sep        Dec        Mar
  1997     1997      1997       1997       1998
-----------------------------------------------
$20.10   $20.04    $19.65     $18.62     $17.98

The Company experienced a 5% revenue reduction in Dial-Up Service from the first
quarter  of 1997 as  compared  to the first  quarter  of 1998 from  $595,360  to
$565,263.  The  decrease  is the result of a  combination  of the  reduction  in
average customer revenues resulting from the new flat rate pricing offered and a
reduction in revenues  from  business  alliances  as explained in the  following
paragraph.

Dial-up  Services have been split  approximately  evenly between  commercial and
residential  customers  throughout  1995, 1996, 1997, and 1998 based on customer
count. Based on revenue the split between  commercial and residential  customers
is 35% to 65% respectively.

RMI  has  established   business   alliances   through   contracts  with  three,
locally-based  unrelated parties for the purpose of providing  Internet services
in secondary markets in the State of Colorado. The services are provided under a
written contract that provides for the locally-based  party to provide equipment
and marketing  services while RMI provides  Internet  access and  administrative
services.  Dial-up  revenues  based on these  contracts  generated  $127,534  in
revenues  for the first  quarter of 1997 and $59,937 in  revenues  for the first
quarter of 1998 for a decrease of 53%.  The POPs  established  pursuant to these
contracts  began in the second  quarter of 1995 and grew to six locations by the
end of 1995 and nine  locations by the end of 1996.  Effective July 3, 1997, the
contract  with  Zero  Error  Networks  was  terminated.  Under  the  termination
agreement,  the Company will  operate the Pueblo POP as a Company only  location
and ZEN will  operate  Alamosa,  Leadville,  and  Hayden  locations.  A  similar
contract in Grand  Junction,  Colorado was  terminated by the Company  effective
April 30, 1997. The marketing efforts by the  locally-based  third party in this
location were minimal and sales were less than $1,000 per month.  The Company is
operating this facility as a Company only location at this time.


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,
T-1 (1.54 Mbps) frame relay connections, point to point connections, and T-3 (45
Mbps) or  fractional  T-3  connections.  The Company  also  offers a  colocation
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.


<PAGE>


Dedicated  business has grown based  principally on ISDN and high speed circuits
(56K,  DS-1,  and DS-3) growth.  ISDN sales have grown from $107,404 to $209,061
from first quarter 1997 to first quarter 1998 for an increase of 95%, while high
speed circuits have increased from $208,027 to $531,509 for the same periods for
an increase of 156%.

The table  below shows the  quarterly  customer  count by each of the  component
services offered for dedicated access as of the dates indicated:

Service         Mar 31  Jun 30  Sep 30  Dec 31  Mar 31  Jun 30  Sep 30  Dec 31
                  1995    1995    1995    1995    1996    1996    1996    1996
------------------------------------------------------------------------------
Private Port        29      30      36      35      42      47      46      54
56 Kbps             18      27      27      34      47      69      71      72
ISDN                 0       0       0       2       3      13      46      80
T-1                  7      10      10      11      16      25      29      30
Colocation           0       1       4       4       6       4       5       6

Service         Mar 31  Jun 30  Sep 30  Dec 31  Mar 31
                  1997    1997    1997    1997    1998
------------------------------------------------------
Private Port        50      41      36      31      23
56 Kbps             78      72      65      60      57
ISDN               168     193     211     233     256
T-1                 65      84      99     123     151
Colocation          11      12      11      21      30


Web Services

Web services  revenues are composed of Web page hosting and Web page  production
and Web page marketing. Web page 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 RMI  servers.  The  advantage  to customers is high speed
access to sites by their targeted  audiences.  The following is a summary of the
number of Web hosting customers as of the dates indicated:


 Mar       Jun       Sep        Dec        Mar       Jun       Sep       Dec
1995      1995      1995       1995       1996      1996      1996      1996
----------------------------------------------------------------------------
   1        21        45         90        157       217       242       341
 
 Mar       Jun       Sep        Dec        Mar
1997      1997      1997       1997       1998
----------------------------------------------
 418       424       417        428        448


Web page hosting  accounted for $104,693 of revenue in the first quarter of 1997
and $138,201 in the first quarter of 1998 for an increase of 32%.


<PAGE>


Web page  production  increased  from  $113,914  for the first  quarter  1997 to
$144,585 for the first quarter 1998 for an increase of 27%.

The Company added a new service, Web page marketing,  to customers in late 1997.
For the first  quarter of 1998,  revenues of $22,006  were  recognized  for this
service.  Web page 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 results in a significant increase in
the level of traffic for a Web site.


OTHER REVENUE

Other revenue includes training revenue ($7,812 decreased to $4,595), consulting
($109,286 decreased to $4,001)and sales from the Information  Exchange,  a voice
messaging  subsidiary ($36,866 decreased to $26,722).  The Information  Exchange
was acquired in a stock  transaction  in late 1996.  The reduction in consulting
revenue occurred due to a large consulting contract in the first quarter of 1997
which was concluded and no similar consulting  arrangement occurred in the first
quarter of 1998.


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 67% of
revenues from that segment for the three months ended March 31, 1997 and 65% for
the same period in 1998. The reduction in gross profit is principally the result
of offering a flat rate dial-up  product which  required a decrease in customers
to modem ratios,  resulting in higher circuit and equipment costs. Gross profits
on equipment sales were approximately equal at 23% for both comparative periods.
Sale of equipment is provided as an accommodation to the Company's customers and
gross profit margin may vary considerably based on the mix of products sold.


SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

General  selling  and  administrative  expenses  ("G  S  &  A")  increased  from
approximately   $1,708,306  in  the  first  quarter  of  1997  to  approximately
$2,473,421 in the first quarter of 1998 or 45%. Exclusive of option compensation
expense,  discussed in the following  paragraph,  G S & A increased 16% from the
first quarter 1997 to the first quarter of 1998. Significant items are discussed
below.

Payroll costs and benefits  increased  53% from  $957,911 to $1,465,806  for the
periods ended March 31, 1997 and 1998  respectively.  Payroll  costs  included a
non-cash charge to  compensation  for the first quarter of 1998 in the amount of
$383,077 for the exercise of employee  stock  options.  Exclusive of this amount
payroll costs and related benefits increased 12%.

Sales and marketing expenses consisting of advertising, promotion, attendance at
trade shows,  printing, and finders fees increased from $47,675 for three months
ending  March 31, 1997 to $49,291 for the same period in 1998 for an increase of
3.4%.


<PAGE>


Facilities rent expense  increased by 3% from $109,544 to $112,891 for the first
quarter of 1997 to the first  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 $74,229 for
the quarter  ended March 31, 1997 to $61,176 for the quarter ended March 31,1998
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 $68,603 in the first quarter of
1997 to  $216,773  in the first  quarter of 1998 or an  increase  of 216%.  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,  and 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.

Outside  services,  which  includes  temporary  to hire  staff and  professional
services,  decreased  11% from $98,544 to $88,061 from the first 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.

During  the first  quarter  of 1998,  the  Company  realized  a gain of  $74,987
relating to the  decision  by the former  President  and CEO and another  former
officer to forego the remainder of severance  payments in exchange for a release
from non-compete  agreements.  The non-competes were released effective March 6,
1998.


LIQUIDITY AND CAPITAL RESOURCES

The  Company  has had a series of  financings  to provide  the funds  during the
initial growth phases when earning have been negative.  These  financings are: a
convertible  debenture  offering  in late 1995 and early  1996 that  brought  in
$490,000 (the  debentures  were  converted to common stock in October,  1996), a
preferred  stock  offering in mid-1996 that netted  $406,000,  an initial public
offering  in  September,  1996,  with  proceeds  of  $3,775,900,  and a  private
placement  (with one unit  consisting  of two  common  shares  and a warrant  to
purchase an additional common share at a set price) from June to September, 1997
which  raised  $1,117,900.  Effective  October 1, 1997,  Mr.  Douglas H.  Hanson
invested  $2,398,577 in common stock and became the President,  Chief  Executive
Officer and Chairman of the Board of the Company.  Mr. Hanson invested  $503,615
in March, 1998 by exercising purchased warrants and options that were granted in
October,  1997, at the time of his initial investment.  Mr. Hanson has the right
to exercise  3,950,000  common stock  purchase  warrants at an exercise price of
$1.90 per share of common stock purchased and 191,385 options to purchase shares
of common stock for a price of $2.6125 per share of common stock purchased.


<PAGE>


On May 15,  1998,  the Company  submitted to the U. S.  Securities  and Exchange
Commission a registration  statement on Form S-1 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  for 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
successful  completion of this registration,  the Company will have the right to
call these 1,365,000 warrants for $0.25 each, and the warrant holder will have a
thirty day period to  exercise  the  warrant at an  exercise  price of $3.14 per
underlying share. 1,900,566 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 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  expects to complete  this  agreement and initiate the first draw around
the end of May 1998.

The Company believes, based on cash flow projections,  that sufficient funds are
available for  operations in the short term,  and funding  alternatives  such as
those described above will be considered if additional funds are required.

RMI is an  Internet  Service  Provider  ("ISP")  with an high  growth  rate  (as
discussed  elsewhere in this  document).  The  Company's  growth is dependent on
continuing  to build a strong  infrastructure  and hiring  high  quality  sales,
technical,  and administrative  personnel.  In order to build the infrastructure
and acquire the human  resources  needed to  maintain an 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 generate  positive monthly  operating cash flows prior to
the end of 1998 if  revenues  continue  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  additional
financing  would  have to result  from  additional  issuances  of equity or debt
securities.



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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.


                                       Date:    May 28, 1998

                                       By:  /s/ Peter J. Kushar
                                            ----------------------------------
                                            Peter J. Kushar
                                            Chief Financial Officer


                                            /s/ Douglas H. Hanson
                                            ----------------------------------
                                            Douglas H. Hanson
                                            Chairman, Chief Executive Officer,
                                            and President