RocketFuel Blockchain has transferred substantially all of the assets used in its payments business to RPay, an entity whose sole director and CEO, Peter M. Jensen, also serves as a director and executive officer of RocketFuel.
According to an Aug. 21 regulatory filing disclosing the related-person transaction, the deal closed on Aug. 13. The transferred assets primarily included intellectual property, contracts, merchant relationships, cash, and accounts receivable attributable to the payments business.
The consideration for the transaction centered on liability relief rather than a cash payment to RocketFuel. RPay assumed $800,000 in deferred compensation that RocketFuel owed to Jensen and $200,000 owed to Bennett J. Yankowitz, a former RocketFuel director and executive who serves on its advisory board. RocketFuel was released from both obligations at the closing of the deal.
Additionally, RocketFuel received a warrant to purchase 160,000 RPay common shares. The warrant is subject to a $1 million repurchase right that RPay can exercise at any time, meaning the filing did not describe RocketFuel as receiving the underlying shares or $1 million in cash upon closing.
RocketFuel noted in the filing that Jensen's interests differed from those of stockholders generally due to the assumption of his compensation claim and the warrant terms. Yankowitz's assumed obligation is payable at $0.25 for each $1 paid to Jensen, at the discretion of RPay's board.
The company stated that its board approved the transaction using a fairness memorandum addressing the disclosed conflicts rather than obtaining an independent valuation or a stockholder vote, determining that a stockholder vote was not required under NRS 78.565.
Although RocketFuel classified the sale as a significant disposition under SEC asset and income tests, the Aug. 21 filing did not include the required unaudited pro forma financials. The company indicated it would provide those details in a later Form 8-K/A amendment.
