Prospectus
Supplement No. 5
(to
Prospectus dated November 1, 2021)
|
Prospectus
Supplement No. 5
Filed
pursuant to Rule 424(b)(3)
Registration
No. 333-260420
|

Prospectus
Supplement No. 5
(To
Final Prospectus dated November 1, 2021)
This
Prospectus Supplement No. 5 supplements and amends the final
prospectus dated November 1, 2021, as previously supplemented (the
“Final Prospectus”), which forms a part of our registration
statement on Form S-1 (No. 333-260420), relating to the
registration of up to 6,666,667 shares of our common stock, par
value $0.001 (the “Common Stock”) issuable upon exercise of Common
Warrants and of up to 533,333 shares of Common Stock issuable upon
exercise of Placement Agent Warrants.
This
Prospectus Supplement No. 5 is being filed to update and supplement
the information in the Final Prospectus with the information
contained in our Quarterly Report on Form 10-Q filed on August 18,
2022 (the “Quarterly Report”). Accordingly, we have attached the
Quarterly Report to this Prospectus Supplement No. 5.
This
Prospectus Supplement No. 5 should be read in conjunction with the
Final Prospectus and is qualified by reference to the Final
Prospectus except to the extent that the information in this
Prospectus Supplement No. 5 supersedes the information contained in
the Final Prospectus.
Our
Common Stock is currently quoted on the OTCQB Marketplace operated
by the OTC Markets Group, Inc. (the “OTCQB”) under the symbol
“RKFL.” On August 31, 2022, the last reported sale price of our
Common Stock was $0.2286.
Investing
in our securities involves a high degree of risk. See “Risk
Factors” beginning on page 7 of the Final
Prospectus.
Neither
the Securities and Exchange Commission (the “SEC”) nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The
date of this prospectus supplement is September 1,
2022.
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
|
☒ |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
|
|
|
|
For
the quarterly period ended June 30, 2022
|
|
|
|
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: 033-17773-NY

ROCKETFUEL
BLOCKCHAIN, INC.
(Exact
Name of Registrant as Specified in its Charter)
Nevada |
|
90-1188745 |
(State
of other jurisdiction of incorporation or organization) |
|
(I.R.S.
Employer Identification No.) |
|
|
|
201
Spear Street, Suite 1100
|
|
|
San
Francisco, CA
|
|
94105 |
(Address
of Principal Executive Offices) |
|
(Zip
Code) |
(424)
256-8560
(Registrant’s
Telephone Number, including Area Code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which Registered |
None |
|
|
|
None |
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 past 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 ☐ No
Indicate
by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was
required to submit and post such files). ☒ Yes ☐
No
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer”, “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the
Exchange Act:
|
Large
Accelerated Filer ☐ |
Accelerated
Filer ☐ |
|
Non-Accelerated
Filer ☒
|
Small
Reporting Company ☒
Emerging
Growth Company ☐
|
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the Registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act) ☐ Yes ☒ No
Number
of shares of issuer’s common stock outstanding at August 18, 2022:
28,698,632.
ROCKETFUEL
BLOCKCHAIN, INC.
TABLE
OF CONTENTS
PART I FINCANCIAL INFORMATION
Item 1 Consolidated Financial Statements
ROCKETFUEL BLOCKCHAIN, INC.
Consolidated Balance
Sheets
(Unaudited)
|
|
June 30, 2022 |
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
1,436,890 |
|
|
$ |
2,634,794 |
|
Restricted cash |
|
|
55,956
|
|
|
|
-
|
|
Accounts
receivable |
|
|
1,362 |
|
|
|
3,475 |
|
Prepaid and other current assets |
|
|
81,057 |
|
|
|
12,350 |
|
Total current
assets |
|
|
1,575,265 |
|
|
|
2,650,619 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation and
amortization of $237,000 and $149,919, respectively |
|
|
540,976 |
|
|
|
460,176 |
|
|
|
|
|
|
|
|
|
|
Total
Assets |
|
$ |
2,116,241 |
|
|
$ |
3,110,795 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable
and accrued expenses |
|
$ |
657,430 |
|
|
$ |
487,200 |
|
Payable to related
party |
|
|
47,679 |
|
|
|
11,277 |
|
Deferred revenue |
|
|
11,292 |
|
|
|
15,073 |
|
Total
current liabilities |
|
|
716,401 |
|
|
|
513,550 |
|
Total
liabilities |
|
|
716,401 |
|
|
|
513,550 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock; $0.001 par value;
50,000,000 shares authorized; and 0 shares issued and outstanding
as of June 30, 2022 and March 31, 2022 |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value;
250,000,000 shares authorized; 28,364,689 and 31,975,083 shares
issued; 28,364,689 and 31,965,083 shares outstanding as of June 30,
2022 and March 31, 2022, respectively |
|
|
28,365 |
|
|
|
31,975 |
|
Additional paid in
capital |
|
|
11,492,762 |
|
|
|
11,214,820 |
|
Accumulated
deficit |
|
|
(10,121,287 |
) |
|
|
(8,646,550 |
) |
Treasury stock, at cost |
|
|
- |
|
|
|
(3,000 |
) |
Total
stockholders’ equity |
|
|
1,399,840 |
|
|
|
2,597,245 |
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity |
|
$ |
2,116,241 |
|
|
$ |
3,110,795 |
|
The accompanying notes are an integral part of these consolidated
financial statements
ROCKETFUEL BLOCKCHAIN, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
|
|
Three
Months Ended |
|
|
Three
Months Ended |
|
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
|
|
|
|
|
|
|
Revenue, net |
|
$ |
8,132 |
|
|
$ |
2,500 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and
development expenses |
|
|
258,965 |
|
|
|
326,217 |
|
General and administrative expenses |
|
|
1,237,954 |
|
|
|
880,874 |
|
Total
operating expenses |
|
|
1,496,919 |
|
|
|
1,207,091 |
|
Loss from
operations |
|
|
(1,488,787 |
) |
|
|
(1,204,591 |
) |
|
|
|
|
|
|
|
|
|
Other income –
Gain from legal settlement |
|
|
540,059 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Loss before provision for income taxes |
|
|
(948,728 |
) |
|
|
(1,204,591 |
) |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(948,728 |
) |
|
$ |
(1,204,591 |
) |
|
|
|
|
|
|
|
|
|
Loss per common share: |
|
|
|
|
|
|
|
|
Basic
and diluted |
|
$ |
(0.03 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic
and diluted |
|
|
31,205,000 |
|
|
|
24,868,416 |
|
The accompanying notes are an integral part of these consolidated
financial statements
ROCKETFUEL BLOCKCHAIN, INC.
CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY
For the Three Month Periods Ended June 30, 2021 and 2022
(Unaudited)
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
|
|
Common Stock Outstanding |
|
|
Treasury Stock |
|
|
Additional
Paid-in |
|
|
Accumulated |
|
|
Total
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
Balance at March 31, 2021 |
|
|
24,438,416 |
|
|
$ |
24,438 |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
4,584,214 |
|
|
$ |
(3,983,626 |
) |
|
$ |
625,026 |
|
Issuance of common
stock in connection with exercise of common stock purchase
warrants |
|
|
550,000 |
|
|
|
550 |
|
|
|
- |
|
|
|
- |
|
|
|
581,950 |
|
|
|
-
|
|
|
|
582,500 |
|
Stock-based
compensation - employees and consultants option grants |
|
|
- |
|
|
|
-
|
|
|
|
- |
|
|
|
- |
|
|
|
316,896 |
|
|
|
-
|
|
|
|
316,896 |
|
Net
loss |
|
|
-
|
|
|
|
-
|
|
|
|
- |
|
|
|
- |
|
|
|
-
|
|
|
|
(1,204,591 |
) |
|
|
(1,204,591 |
) |
Balance at June 30, 2021 |
|
|
24,988,416 |
|
|
$ |
24,988 |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
5,483,060 |
|
|
$
|
(5,188,217 |
) |
|
$
|
319,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2022 |
|
|
31,975,083 |
|
|
$ |
31,975 |
|
|
|
(10,000 |
) |
|
$
|
(3,000 |
) |
|
$
|
11,214,820 |
|
|
$
|
(8,646,550 |
) |
|
$
|
2,597,245 |
|
Stock-based
compensation – employees and consultants option grants |
|
|
-
|
|
|
|
-
|
|
|
|
- |
|
|
|
- |
|
|
|
291,382 |
|
|
|
- |
|
|
|
291,382 |
|
Cancellation of
common stock |
|
|
(3,610,394 |
) |
|
|
(3,610 |
) |
|
|
10,000 |
|
|
|
3,000 |
|
|
|
(13,440 |
) |
|
|
(526,009 |
) |
|
|
(540,059 |
) |
Net
loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(948,728 |
) |
|
|
(948,728 |
) |
Balance as of June 30, 2022 |
|
|
28,364,689 |
|
|
$ |
28,365 |
|
|
|
- |
|
|
$
|
- |
|
|
$
|
11,492,762 |
|
|
$
|
(10,121,287 |
) |
|
$
|
1,399,840 |
|
The accompanying notes are an integral part of these consolidated
financial statements
ROCKETFUEL
BLOCKCHAIN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three
Months Ended |
|
|
Three
Months Ended |
|
|
|
June
30, 2022 |
|
|
June
30, 2021 |
|
Cash
Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(948,728 |
) |
|
$ |
(1,204,591 |
) |
Adjustments
to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
|
87,081 |
|
|
|
- |
|
Stock
based compensation |
|
|
291,382 |
|
|
|
316,896 |
|
Gain
from legal settlement |
|
|
(540,059 |
) |
|
|
- |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
2,113 |
|
|
|
(10,000 |
) |
Prepaid
expenses and other current assets |
|
|
(68,707 |
) |
|
|
(55,000 |
) |
Accounts
payable and accrued expenses |
|
|
170,230 |
|
|
|
88,000 |
|
Payable
to related party |
|
|
36,402 |
|
|
|
(19,145 |
) |
Deferred
revenue |
|
|
(3,781 |
) |
|
|
7,500 |
|
Net
cash flows used in operating activities |
|
|
(974,067 |
) |
|
|
(876,340 |
) |
|
|
|
|
|
|
|
|
|
Cash
Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Purchase
of property and equipment |
|
|
(5,393 |
) |
|
|
- |
|
Software
development cost |
|
|
(162,488 |
) |
|
|
- |
|
Net
cash flows used in investing activities |
|
|
(167,881 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds
from issuance of common stock in connection with exercise of common
stock purchase warrants |
|
|
- |
|
|
|
582,500 |
|
Net
cash flows provided by financing activities |
|
|
- |
|
|
|
582,500 |
|
Net
change in cash and restricted cash |
|
|
(1,141,948 |
) |
|
|
(293,840 |
) |
Cash
and restricted cash at beginning of period |
|
|
2,634,794 |
|
|
|
800,331 |
|
Cash
and restricted cash at end of period |
|
$ |
1,492,846 |
|
|
$ |
506,491 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Cash
paid for interest |
|
$ |
- |
|
|
$ |
- |
|
Cash
paid for income taxes |
|
$ |
- |
|
|
$ |
- |
|
|
|
2022
|
|
|
2021
|
|
Reconciliation of cash and restricted cash within the
consolidated balance sheets to the amounts shown in the
consolidated statements of cash flows above at June 30: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
1,436,890 |
|
|
$ |
506,491 |
|
Restricted cash |
|
|
55,956 |
|
|
|
- |
|
Total
cash and restricted cash |
|
$ |
1,492,846 |
|
|
$ |
506,491 |
|
The
accompanying notes are an integral part of these consolidated
financial statements
ROCKETFUEL
BLOCKCHAIN, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE
30, 2022
(UNAUDITED)
1. Business
We
(or the “Company”) provide cryptocurrency and other check-out and
payment systems that securely automate and simplify the way online
payment and shipping information is received by merchants from
their customers. Our “one click” checkout solution is modeled on
the “buy now” button on leading eCommerce sites. Our check-out
systems are designed to enhance customers’ data protection,
enabling consumers to pay for goods and services using
cryptocurrencies or by direct transfers from their bank accounts
without exposing spending credentials such as credit card data. At
the same time, our check-out systems are designed to increase the
speed, security and ease of use for both customers and merchants
and include a merchant portal that provides detailed transactions
and metrics about payments received by the merchant. Our system
also includes a customer portal where shoppers are able to track
their payments, configure payment defaults and connect with various
cryptocurrency exchanges and banks to facilitate payment to
merchants. Merchants are able to integrate a unique pop-up user
interface that allows customers to pay directly from their
eCommerce checkout page with no need to redirect to another website
or web page.
Our
corporate headquarters are located in San Francisco,
California.
On
May 12, 2022, the Company incorporated a wholly owned subsidiary,
RocketFuel (BVI) Ltd., in the British Virgin Islands. The
subsidiary is formed to be the issuer of digital tokens in
connection with our planned loyalty program. On May 17, 2022, the
Company incorporated another wholly owned subsidiary, RocketFuel
A/S, in Denmark. This subsidiary will engage in our B2B cross
border settlement program. The subsidiary received a Virtual Asset
Services Provider (VASP) license in July 2022, allowing it to offer
a variety of crypto-based services in the EU. Both subsidiaries
have not commenced commercial operations as of June 30,
2022.
2.
Summary of Significant Accounting Policies
Other
than as discussed herein, our significant accounting policies are
described in Note 2 to the audited financial statements as of March
31, 2022 which are included in our Annual Report on Form 10-K as
filed with the SEC on July 15, 2022.
Basis of Presentation
The accompanying unaudited financial statements have been prepared
in accordance with U.S. generally accepted accounting principles
(“U.S. GAAP”) for interim financial information pursuant to Rule
8-03 of Regulation S-X. Accordingly, these unaudited financial
statements do not include all of the information and disclosures
required by U.S. GAAP for complete financial statements. In the
opinion of management, the accompanying unaudited financial
statements include all adjustments (consisting only of normal
recurring adjustments), which we consider necessary, for a fair
presentation of those financial statements. The results of
operations for the three months ended June 30, 2022 and cash flows
for the three months ended June 30, 2022 may not necessarily be
indicative of results that may be expected for any succeeding
quarter or for the entire fiscal year. The March 31, 2022 balance
sheet included herein was derived from the audited financial
statements included in the Company’s Annual Report on Form 10-K as
of that date. These unaudited financial statements should be read
in conjunction with our audited financial statements as of March
31, 2022 as filed with the Securities and Exchange Commission (the
“SEC”) on July 15, 2022.
Principles of Consolidation
The
accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries in accordance with
consolidation accounting guidance. The Company’s subsidiaries
consist of RocketFuel Blockchain Company (RBC) (incorporated in
Nevada), RocketFuel A/S (incorporated in Denmark), and RocketFuel
(BVI) (incorporated in the British Virgin Islands), the latter two
of which were incorporated during the quarter ended June 30, 2022.
All intercompany balances and transactions have been eliminated in
consolidation.
Use of Accounting Estimates
The
preparation of these consolidated financial statements in
conformity with U.S. GAAP requires management to make estimates and
judgments, which are evaluated on an ongoing basis, and that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and
expenses during the reporting periods. Management bases its
estimates on historical experience and on various other assumptions
that it believes are reasonable under the circumstances, the
results of which form the basis for making judgments about the
carrying values of assets and liabilities and the amounts of
revenues and expenses that are not readily apparent from other
sources. Actual results could differ from those estimates and
judgments.
Cash and Cash Equivalents
Cash includes cash on hand. We consider all highly-liquid,
temporary cash investments with a maturity date of three months or
less to be cash equivalents.
Restricted Cash
In
relation to the Company’s incorporation of a subsidiary in Denmark,
a cash deposit of $55,956 was made into an escrow account
controlled by a legal firm. This cash is not available to fund
immediate or general business use until it is released from escrow
into an operating cash account of the Denmark subsidiary. Until
this release occurs, the cash is restricted in nature and is
separately disclosed on the Company’s consolidated balance sheet
and consolidated statement of cash flows.
ROCKETFUEL
BLOCKCHAIN, INC.
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2022
(UNAUDITED)
Software
Development Costs
The Company accounts for software development costs in accordance
with ASC 350-40. Research
and development costs are expensed as incurred, except for certain
costs which are capitalized in connection with the development of
its internal-use software and website. These capitalized costs are
primarily related to the application software that is hosted by the
Company and accessed by its customers through the Company’s
website. In addition, the Company capitalizes certain general and
administrative costs related to the customization and development
of our internal business systems. Costs incurred in the preliminary
stages of development are expensed as incurred. Once an application
has reached the development stage, internal and external costs, if
direct and incremental, are capitalized until the software is
substantially complete and ready for its intended use.
Capitalization ceases upon completion of all substantial testing
performed to ensure the product is ready for its intended use. The
Company also capitalizes costs related to specific upgrades and
enhancements of internal-use software when it is probable that the
expenditures will result in additional functionality. Maintenance
and training costs are expensed as incurred. Capitalized internal
use software costs are recorded as part of property and equipment
and are amortized on a straight-line basis over an estimated useful
life of two years.
Property
and Equipment
Property
and equipment are stated at cost. Depreciation of property and
equipment is calculated using the straight-line method over the
estimated useful lives of the assets, which is three years for the
Company. Maintenance and repairs are charged to operations as
incurred. Significant improvements are capitalized and depreciated
over the useful life of the assets. Gains or losses on disposition
or retirement of property and equipment are recognized in operating
expenses.
The
Company reviews the carrying value of property and equipment for
impairment whenever events and circumstances indicate that the
carrying value of an asset may not be recoverable from the
estimated future cash flows expected to result from its use and
eventual disposition. In cases where undiscounted expected future
cash flows are less than the carrying value, an impairment loss is
recognized equal to an amount by which the carrying value exceeds
the fair value of the related assets. The factors considered by
management in performing this assessment include current operating
results, trends and prospects, the manner in which the property is
used, the effects of obsolescence, demand, competition, and other
economic factors.
Revenue
Recognition
During
March 2021 we commenced commercial operations. Our revenues will be
generated from (i) fees charged in connection with the
implementation of our blockchain technology; and (ii) ongoing daily
transactional fees derived as a negotiated percentage of the
transactional revenues earned by our merchant customers.
Our
revenue recognition policy follows the guidance from Accounting
Standards Codification (“ASC”) 606, “Revenue Recognition,” and
Accounting Standards Update No. 2014-09 Revenue from Contracts with
Customers (Topic 606) which provides guidance on the recognition,
presentation, and disclosure of revenue in consolidated financial
statements. We determine revenue recognition through the following
steps: (i) identification of the contract, or contracts, with a
customer; (ii) identification of the performance obligations in the
contract; (iii) determination of the transaction price; (iv)
allocation of the transaction price to the performance obligations
in the contract and (v) recognition of revenue when a performance
obligation is satisfied. Collectability is assessed based on a
number of factors, including the creditworthiness of a client, the
size and nature of a client’s website and transaction history.
Amounts billed or collected in excess of revenue recognized are
included as deferred revenue. An example of this deferred revenue
would be arrangements where clients request or are required by us
to pay in advance of delivery.
Earnings (Loss) Per Share
Earnings (loss) per share is computed by dividing net income (loss)
by the weighted average number of common shares outstanding during
the reporting period. Diluted earnings per share is computed
similar to basic earnings per share, except the weighted average
number of common shares outstanding are increased to include
additional shares from the assumed exercise of share options, if
dilutive. The dilutive effect, if any, of convertible instruments
or warrants is calculated using the treasury stock method. There
are no outstanding dilutive instruments as the outstanding
convertible instruments, stock options and warrants would be
anti-dilutive if converted or exercised for the three months ended
June 30, 2022 and 2021.
The
following table summarizes the securities that were excluded from
the diluted per share calculation because the effect of including
these potential shares was antidilutive due to the Company’s net
loss position even though the exercise price could be less than the
average market price of the common shares:
Schedule
of Anti-dilutive Securities Excluded from Diluted Per Share
Calculation
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
Stock options – vested and
exercisable |
|
|
2,735,290 |
|
|
|
1,388,327 |
|
Warrants |
|
|
10,665,982 |
|
|
|
2,515,982 |
|
Total
potential dilution |
|
|
13,401,272 |
|
|
|
3,904,309 |
|
ROCKETFUEL
BLOCKCHAIN, INC.
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2022
(UNAUDITED)
Stock-based
Compensation
The
Company applies the provisions of ASC 718, Compensation - Stock
Compensation, (“ASC 718”) which requires the measurement and
recognition of compensation expense for all stock-based awards made
to employees, including employee stock options, in the statements
of operations.
For
stock options issued to employees and members of the Board of
Directors (the “Board) for their services, the Company estimates
the grant date fair value of each option using the Black-Scholes
option pricing model. The use of the Black-Scholes option pricing
model requires management to make assumptions with respect to the
expected term of the option, the expected volatility of the common
stock consistent with the expected life of the option, risk-free
interest rates and expected dividend yields of the common stock.
For awards subject to service-based vesting conditions, including
those with a graded vesting schedule, the Company recognizes
stock-based compensation expense equal to the grant date fair value
of stock options on a straight-line basis over the requisite
service period, which is generally the vesting term. Forfeitures
are recorded as they are incurred as opposed to being estimated at
the time of grant and revised.
Pursuant
to Accounting Standards Update (“ASU”) 2018-07, Compensation –
Stock Compensation (Topic 718): Improvements to Non-employee
Share-Based Payment Accounting, the Company accounts for stock
options issued to non-employees for their services in accordance
with ASC 718. The Company uses valuation methods and assumptions to
value the stock options that are in line with the process for
valuing employee stock options noted above.
Income
Taxes
We
are required to file federal and state income tax returns in the
United States. The preparation of these tax returns requires us to
interpret the applicable tax laws and regulations in effect in such
jurisdictions, which could affect the amount of tax paid by us. In
consultation with our tax advisors, we base our tax returns on
interpretations that are believed to be reasonable under the
circumstances. The tax returns, however, are subject to routine
reviews by the various federal and state taxing authorities in the
jurisdictions in which we file tax returns. As part of these
reviews, a taxing authority may disagree with respect to the income
tax positions taken by us (“uncertain tax positions”) and,
therefore, may require us to pay additional taxes. As required
under applicable accounting rules, we accrue an amount for our
estimate of additional income tax liability, including interest and
penalties, which we could incur as a result of the ultimate or
effective resolution of the uncertain tax positions. We account for
income taxes using the asset and liability method. Under the asset
and liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributed to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which
those temporary differences and carry-forwards are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. A valuation allowance is
established when necessary to reduce deferred tax assets to amounts
expected to be realized.
In
assessing the realization of deferred tax assets, management
considers whether it is more likely than not that some portion or
all of the deferred tax assets will be realized. The ultimate
realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those
temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future
taxable income and tax planning strategies in making this
assessment.
Impact
of COVID-19 on Our Business
The
COVID-19 pandemic has resulted, and may continue to result, in
significant economic disruption despite progress made in the
development and distribution of vaccines. It has already disrupted
global travel, supply chains and the labor market and adversely
impacted global commercial activity. Considerable uncertainty still
surrounds COVID-19, the evolution of its variants, its potential
long-term economic effects, as well as the effectiveness of any
responses taken by government authorities and businesses and of
various efforts to inoculate the global population. The travel
restrictions, limits on hours of operations and/or closures of
non-essential businesses, and other efforts to curb the spread of
COVID-19 have significantly disrupted business activity globally
and there is uncertainty as to when these disruptions will fully
subside.
Significant
uncertainty continues to exist concerning the impact of the
COVID-19 pandemic on our customers’ and prospects’ business and
operations in future periods. Although our total revenues for the
three months ended June 30, 2022 were not materially impacted by
COVID- 19, we believe our revenues may be negatively impacted in
future periods until the effects of the pandemic have fully
subsided and the current macroeconomic environment has
substantially recovered. The uncertainty related to COVID-19 may
also result in increased volatility in the financial projections we
use as the basis for estimates and assumptions used in our
financial statements. We have adapted our operations to meet the
challenges of this uncertain and rapidly evolving situation,
including establishing remote working arrangements for our
employees, limiting non-essential business travel, and cancelling
or shifting our customer, employee, and industry events to a
virtual-only format for the foreseeable future. We have not
received any government assistance from various relief packages
available in countries where we operate.
Effects
of the COVID-19 pandemic that may negatively impact our business in
future periods include, but are not limited to: limitations on the
ability of our customers to conduct their business, purchase our
products and services, and make timely payments; curtailed consumer
spending; deferred purchasing decisions; delayed consulting
services implementations; labor shortages and decreases in product
licenses revenues driven by channel partners. We will continue to
actively monitor the nature and extent of the impact to our
business, operating results, and financial condition.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the
Financial Accounting Standards Board or other standard setting
bodies that may have an impact on our accounting and reporting. We
believe that such recently issued accounting pronouncements and
other authoritative guidance for which the effective date is in the
future either will not have an impact on our accounting or
reporting or that such impact will not be material to our financial
position, results of operations and cash flows when
implemented.
3.
Going Concern
Our
consolidated financial statements have been presented on the basis
that we are a going concern, which contemplates the realization of
assets and satisfaction of liabilities in the normal course of
business. We incorporated our business on January 12, 2018, the
date of our inception, and commenced commercial operations in March
2021. During the three months ended June 30, 2022 and 2021, we
reported a net loss of $948,728 and $1,204,591, respectively, which
included as a component of general and administrative expenses in
the statements of operations a non-cash stock-based compensation
charge of $291,382 and $316,896, respectively, and cash flows used
in operating activities during the three months ended June 30, 2022
and 2021 of $974,067 and $876,340, respectively. These factors,
among others, raise substantial doubt about the ability of the
Company to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
We
will require additional financing to continue to develop our
product and execute on our business plan. However, there can be no
assurances that we will be successful in raising the additional
capital necessary to continue operations and execute on our
business plan. During the year ended March 31, 2022, we raised
$882,500 through the exercise by certain investors of common stock
purchase warrants and completed a public offering
of 6,666,667 shares of Common Stock and accompanying
warrants to purchase 6,666,667 shares of Common Stock and
raised approximately $4.4 million in proceeds, net of the
issuance costs. We have used and plan to continue using the net
proceeds of the public offering and warrant exercise to recruit key
management and operational personnel, to retain software and
blockchain developers and to develop our blockchain based check-out
solution. Management believes the funding from the public offering,
the exercise of the common stock purchase warrant, and the growth
strategy actions executed and planned for execution could
contribute to our ability to mitigate any substantial doubt as to
our ability to continue as a going concern.
4.
Property, Plant & Equipment
The
Company’s property, plant and equipment assets are comprised of the
following:
Schedule of Property Plant And Equipment
|
|
Useful Life |
|
June 30, 2022 |
|
|
March 31, 2022 |
|
Capitalized software
development costs |
|
2 years |
|
$ |
749,188 |
|
|
$ |
586,700 |
|
Computer equipment |
|
3 years |
|
|
28,788 |
|
|
|
23,395 |
|
Less:
Accumulated depreciation and amortization |
|
|
|
|
(237,000 |
) |
|
|
(149,919 |
) |
Property and
equipment, net |
|
|
|
$ |
540,976 |
|
|
$ |
460,176 |
|
ROCKETFUEL
BLOCKCHAIN, INC.
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2022
(UNAUDITED)
Capitalized
software development costs represent the costs incurred during the
development stage, when direct and incremental internal and
external costs, are capitalized until the software is substantially
complete and ready for its intended use. The Company also
capitalizes costs related to specific upgrades and enhancements of
internal-use software when it is probable that the expenditures
will result in additional functionality.
Depreciation
and amortization expenses amount to $87,081 and $nil for the three
months ended June 30, 2022 and 2021, respectively.
5.
Related Party Transactions
During
the three months ended June 30, 2022 and 2021, our chief financial
officer was affiliated with legal counsel who provided us with
general legal services (the “Affiliate”). We recorded legal fees
paid to the Affiliate of $58,058 and $24,160 for the three months
ended June 30, 2022 and 2021, respectively. As of June 30, 2022 and
March 31, 2022, we had $47,679 and $11,277, respectively, payable
to the Affiliate.
6.
Deferred Revenue
We
enter into certain contracts typically having initial one-year
terms which define the scope of services to be provided. These
contracts can include agreed-upon setup fees during the initial
one-year term, which setup fees are recorded as deferred revenue
and amortized ratably over the initial one-year term. During the
three months ended June 30, 2022 and 2021, we recorded revenues of
$8,132 and $2,500, respectively. Deferred revenue was $11,292
and $15,073 as of June 30, 2022 and March 31, 2022,
respectively.
7.
Stockholders’ Equity
Cancellations
of Stock:
On
October 6, 2021, we entered into a contract with one customer
having a one-year term from the date of execution that provided for
the issuance of 10,000 shares of our common stock valued at $1.00
per share in consideration of being an early adopter of our
blockchain technology. In March 2022, in settlement of a customer
dispute, we repurchased the 10,000 shares of stock issued in
October 2021 for $3,000. During the three months ended June 30,
2022, the 10,000 shares were cancelled.
On June 7, 2022, we entered into a settlement agreement in the
legal proceedings with Joseph Page, our
former director and chief technology officer, as defendant, whereunder Page surrendered
3,600,394 shares of the Company’s common stock. In connection with
this settlement, we recognized a gain of $540,059, calculated based
on the Company’s share price of $0.15 per share on the date of
settlement of the legal proceedings. This gain was recorded in
other income for the three months ended June 30, 2022 in the
accompanying consolidated statements of operations. Immediately
after these shares were transferred to the Company, the 3,600,394
shares were cancelled and we recorded cancellation of these
treasury shares for the three months ended June 30,
2022.
As of June 30, 2022, and March 31, 2022, we had 28,364,689 shares
and 31,965,083 shares of our common stock outstanding,
respectively.
Warrants:
As of
June 30, 2022, the total outstanding warrants to purchase of the
Company’s common stock were 10,665,982 with
a weighted average exercise price of $0.84.
There were no new warrants issued during the three months ended
June 30, 2022. As of June 30, 2022 and March 31, 2022, the weighted
average remaining contractual terms were 3.86 and 4.11
years, respectively.
8.
Stock- Based Compensation
Stock
Option Plan:
On
August 8, 2018, the Board and stockholders holding a majority of
our voting power approved the RocketFuel Blockchain, Inc., 2018
Plan, which plan enables us to make awards that qualify as
performance-based compensation. Under the terms of the 2018 Plan,
the options will (i) be incentive stock options, (ii) have an
exercise price equal to the fair market value per share of our
common stock on the date of grant as determined by an independent
valuation by a qualified appraiser, (iii) have a term of 10
years, (iv) vest and become exercisable pursuant to the
terms set forth in the grantees stock option agreement, (v) be
subject to the exercise, forfeiture and termination provisions set
forth in the 2018 Plan and (vi) otherwise be evidenced by and
subject to the terms of our standard form of stock option
agreement. We initially reserved 2,000,000 shares of our
common stock for issuance in connection with awards under the plan.
On September 15, 2020 and March 18, 2021, our board of directors
unanimously resolved to amend the 2018 Plan to increase the number
of shares of our common stock available for grant to 4,000,000
shares and 6,000,000 shares, respectively. On May 10, 2022, the
Board has approved a plan to increase the number of shares to
8,000,000 for 2018 plan. As of June 30, 2022 and March
31, 2022, there
were 2,176,198 and 393,987 shares,
respectively, of our common stock available for grant pursuant to
the 2018 Plan.
ROCKETFUEL
BLOCKCHAIN, INC.
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2022
(UNAUDITED)
Service-Based
Stock Option Grants
In
determining the fair value of the service-based options during the
three months ended June 30, 2022, we utilized the Black-Scholes
pricing model utilizing the following assumptions:
Schedule of Share-based Payment Award, Stock Options, Valuation
Assumptions
Option
exercise price per share |
|
|
$0.21
- $0.30 |
|
|
|
Grant
date fair value per share |
|
|
$0.20
- $0.29 |
|
|
|
Expected
volatility |
|
|
163% |
|
|
|
Expected
term of option in years |
|
|
6.25 |
|
|
|
Range
of risk-free interest rate |
|
|
2.5% |
|
|
|
Dividend
yield |
|
|
- |
|
|
|
Activity
under the 2018 Plan for all service-based stock options for the
three months ended June 30, 2022 are as follows:
Schedule of Stock Option Activity
|
|
Options
Outstanding
|
|
|
Weighted-
Average
Exercise
Price
per Share
|
|
|
Weighted-
Average
Remaining
Contractual
Term
in Years
|
|
|
Aggregate
Intrinsic
Value
|
|
Options outstanding at April 1, 2022: |
|
|
5,606,013 |
|
|
$ |
0.33 |
|
|
|
8.57 |
|
|
$ |
5,000 |
|
Granted |
|
|
100,000 |
|
|
|
0.26 |
|
|
|
|
|
|
|
|
|
Exercised |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Cancelled or forfeited |
|
|
(482,211 |
) |
|
|
1.96 |
|
|
|
|
|
|
|
|
|
Options outstanding as of June
30, 2022 |
|
|
5,223,802 |
|
|
$ |
0.33 |
|
|
|
8.31 |
|
|
$ |
- |
|
Options vested and exercisable as
of June 30, 2022 |
|
|
2,485,282 |
|
|
$ |
0.29 |
|
|
|
|
|
|
$ |
- |
|
The
aggregate intrinsic value in the table above represents the total
pre-tax intrinsic value (the difference between the closing price
of the common stock on June 30, 2022 of $0.16 and the exercise
price of each in-the-money option) that would have been received by
the option holders had all option holders exercised their options
on June 30, 2022. There were no service-based stock options
exercised under the 2018 Plan for the three months ended June 30,
2022 and 2021.
For
the three months ended June 30, 2022 and 2021, we recorded
stock-based compensation expense for service-based stock options
pursuant to the 2018 Plan in the amount of $264,235 and $291,492,
respectively. As of June 30, 2022 and March 31, 2022, we had
$3,015,293 and $3,336,948 of unrecognized stock-based compensation
cost related to service-based stock options,
respectively.
Performance-Based
Stock Option Grants
We
also granted performance-based options pursuant to the 2018 Plan to
Rohan Hall, our chief technology officer, which are exercisable
into 600,000 shares of our common stock subject to certain
designated milestones. On March 18, 2021, our Board of Directors
determined that Mr. Hall earned all of the performance-based
options effective February 1, 2021. The Board of Directors also
entered into a resolution whereby 75,000 shares of our common stock
underlying the performance-based options would vest immediately and
525,000 shares of our common stock underlying the performance-based
option would vest ratably over a 48-month period with the first
vesting date being February 1, 2021.
ROCKETFUEL
BLOCKCHAIN, INC.
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2022
(UNAUDITED)
In
determining the fair value of the performance-based options granted
to Mr. Hall on September 14, 2020 and earned effective February 1,
2021, we utilized the Black-Scholes pricing model utilizing the
following assumptions:
Schedule of Share-based Payment Award, Stock Options, Valuation
Assumptions
|
|
Performance
-Based
Options
|
|
Option exercise price per share |
|
$ |
1.08 |
|
Grant date fair market value per share |
|
$ |
1.08 |
|
Expected term of option in years |
|
|
6.25 |
|
Expected volatility |
|
|
240.1 |
% |
Expected dividend rate |
|
|
0.00 |
% |
Risk free interest rate |
|
|
0.54 |
% |
Activity
under the 2018 Plan for all performance-based stock options for the
three months ended June 30, 2022 is as follows:
Schedule of Stock Option Activity
|
|
Options
Outstanding
|
|
|
Weighted-
Average
Exercise
Price
per Share
|
|
|
Weighted-
Average
Remaining
Contractual
Term
in Years
|
|
|
Aggregate
Intrinsic
Value
|
|
Options outstanding at April 1, 2022: |
|
|
600,000 |
|
|
$ |
0.33 |
|
|
|
8.46 |
|
|
$ |
- |
|
Granted |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Exercised |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Cancelled or forfeited |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Options outstanding as of June 30, 2022 |
|
|
600,000 |
|
|
$ |
0.33 |
|
|
|
8.21 |
|
|
$ |
- |
|
Options vested and exercisable as
of June 30, 2022 |
|
|
250,008 |
|
|
$ |
0.33 |
|
|
|
|
|
|
$ |
- |
|
The aggregate intrinsic value in the table above represents the
total pre-tax intrinsic value (the difference between the closing
price of the common stock on June 30, 2022 of $0.16 and the
exercise price of each in-the-money option) that would have been
received by the option holders had all option holders exercised
their options on June 30, 2022. There were no performance-based
stock options exercised under the 2018 Plan for the three months
ended June 30, 2022 and 2021.
For
the three months ended June 30, 2022 and 2021, we recorded
stock-based compensation expense for performance-based stock
options pursuant to the 2018 Plan in the amount of $27,147 and
$25,404, respectively. As of June 30, 2022 and March 31, 2022, we
had $288,016 and $315,164 of unrecognized stock-based compensation
cost related to performance-based stock options, respectively.
There were no performance-based stock options exercised under the
2018 Plan for the three months ended June 30, 2022 and
2021.
9.
Commitments and Contingencies
Legal
Proceedings
Other
than as set forth below, we are not the subject of any pending
legal proceedings; and to the knowledge of management, no
proceedings are presently contemplated against us by any federal,
state or local governmental agency. Further, to the knowledge of
management, no director or executive officer is party to any action
in which any has an interest adverse to us.
On
October 8, 2020, we filed a lawsuit in the U.S. District Court for
the Central District of California against Joseph Page, our former
director and chief technology officer. On January 13, 2021, the
case was transferred to the U.S. District Court for the District of
Nevada, Las Vegas Division. The causes of action include securities
fraud under Federal and California law; fraud, breach of fiduciary
duty, negligent misrepresentation and unjust enrichment under
California law; and violation of California Business and
Professions Code §17200 et seq.
On
May 29, 2019, Mr. Page resigned from our board. After his
resignation, we retained independent patent counsel to review our
patent applications. In connection with this review, we discovered
certain deficiencies in some of the applications and in their
assignments to us. We determined that all of the applications had
been abandoned. Based on this review, we decided to refile three of
our applications with the U.S. Patent and Trademark Office, which
we did in May 2020. It is our belief that the three newly filed
patent applications cover and/or disclose the same subject matter
as we disclosed in the five original patent applications. In this
case, our rights may be subject to any intervening patent
applications made after the dates of the original applications. In
the lawsuit, we were alleging that Mr. Page was aware of the
abandonments when he assigned the patents to RocketFuel Blockchain
Company (“RBC”), a private corporation that he controlled, and that
he failed to disclose to us the abandonments when the Company
acquired RBC in exchange for shares of the Company’s Common Stock.
Mr. Page filed an answer denying the Company’s claims and asserted
cross- and counterclaims against the Company and several of the
Company’s shareholders alleging breach of contract and fraud. In
September 2021, Mr. Page voluntarily dismissed all of the
counterclaims against the shareholders.
ROCKETFUEL
BLOCKCHAIN, INC.
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2022
(UNAUDITED)
On June 7, 2022, RBC entered into a settlement agreement in the
legal proceedings between the Company as plaintiff, and Joseph Page
as defendant, whereunder Page surrendered 3,600,394
shares of the Company’s common stock, and kept 1,500,000
shares. Mr. Page represents and warrants that he has not filed or
assisted anyone else in filing any patent applications that would
preempt or infringe upon the Company’s patent applications.
Plaintiff and defendant have each released their claims against
each other and covenanted not to sue the other, including related
parties and stakeholders, with the exclusion of current or future
claims against EGS. The parties agreed to a Stipulated Dismissal of
the Action with Prejudice filed with the court. In connection with
this settlement, we recognized a gain of $540,059, calculated based
on the Company’s share price of $0.15 per share on the date of
settlement of the legal proceedings. This gain was recorded in
other income for the three months ended June 30, 2022 in the
accompanying consolidated statements of operations (see Note
7).
On
March 2, 2021, we filed a lawsuit in the U.S. District Court for
the Southern District of New York against Ellenoff Grossman &
Schole LLP (“EGS”) for negligence and legal malpractice, breach of
contract and breach of fiduciary duty. EGS had represented RBC
prior to the Business Combination and represented us after the
closing of the Business Combination through August 2019. In the
litigation against Mr. Page, he has alleged that he provided
information to an EGS partner that the patent applications had been
abandoned and that EGS failed to inform RBC and us of the fact. We
are seeking damages and the return of legal fees previously
paid.
At
the date of this report, the Company is unable to estimate the
probability of success or dollar amount of rulings in the March 2,
2021 case against EGS, and as a result, has not accrued any
potential benefit to the Company’s balance sheet. Attorney fees
related to these proceedings are expensed as incurred.
10.
Subsequent Events
We
evaluated all events or transactions that occurred after the
balance sheet date through the date when we issued these financial
statements and, other than the matters discussed below, we did not
have any other material recognizable subsequent events during this
period.
We
entered into a marketing service agreement on July 20, 2022 with a
certain marketing firm whereby the marketing firm provides various
marketing services for us. In connection with this agreement, we
issued 333,943 shares in consideration for the performance of the
services by this firm.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Forward-Looking
Statements
This
Quarterly Report on Form 10-Q contains certain statements that are
“forward-looking” within the meaning of the federal securities
laws. These forward-looking statements and other information are
based on our beliefs as well as assumptions made by us using
information currently available.
The
words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“will,” “should” and similar expressions, as they relate to us, are
intended to identify forward-looking statements. Such statements
reflect our current views with respect to future events and are
subject to certain risks, uncertainties and assumptions, and are
not guaranties of future performance. Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated,
expected, intended or using other similar expressions. We are
making investors aware that such forward-looking statements,
because they relate to future events, are by their very nature
subject to many important factors that could cause actual results
to differ materially from those contemplated by the forward-looking
statements contained in this Quarterly Report on Form 10-Q.
Important factors that could cause actual results to differ from
our predictions include, without limitation:
|
● |
Market
acceptance of our products and services; |
|
● |
Competition
from existing products or new products that may emerge; |
|
● |
The
implementation of our business model and strategic plans for our
business and our products; |
|
● |
Estimates
of our future revenue, expenses, capital requirements and our need
for financing; |
|
● |
Our
financial performance; |
|
● |
Current
and future government regulations; |
|
● |
Developments
relating to our competitors; and |
|
● |
Other
risks and uncertainties, including those listed under the section
titled “Risk Factors” in our annual report filed on Form 10-K filed
with the Securities and Exchange Commission on July 15,
2022. |
Although
we have sought to identify the most significant risks to our
business, we cannot predict whether, or to what extent, any of such
risks may be realized, nor can there be any assurance that we have
identified all possible issues which we might face. For all of
these reasons, the reader is cautioned not to place undue reliance
on forward-looking statements contained herein, which speak only as
of the date hereof. We assume no responsibility to update any
forward-looking statements as a result of new information, future
events, or otherwise except as required by law. We urge readers to
review carefully the risk factors described in this Quarterly
Report and in our annual report filed on Form 10-K filed with the
Securities and Exchange Commission on July 15, 2022. You can read
these documents at www.sec.gov.
Overview
Our
Business
We
provide payment and check-out systems enabling shoppers on
e-commerce sites to pay using cryptocurrencies and direct bank
transfers. Currently our payment and check-out systems focus on B2C
applications; we are currently developing B2B capabilities that
will among other things enable businesses to receive payments on
their invoices in cryptocurrencies. Our check-out systems are based
upon blockchain technology and are designed to reduce costs and
increase speed, security and ease of use. We believe that users of
our systems enjoy a seamless check-out experience compared to
current online shopping solutions, and that merchants will realize
cost savings and other advantages over credit-card based payment
systems.
We
are developing versions of our payment systems for use for in-store
purchases and other applications. Our check-out and payment systems
securely automate and simplify the way online payment and shipping
information is received by merchants from their customers. Our “one
click” checkout solution is modeled on the “buy now” button on
leading eCommerce sites. Our check-out systems are designed to
enhance customers’ data protection, enabling consumers to pay for
goods and services using cryptocurrencies or by direct transfers
from their bank accounts without exposing spending credentials such
as credit card data. At the same time, our check-out systems are
designed to increase the speed, security and ease of use for both
customers and merchants and include a merchant portal that provides
detailed transaction information, metrics and reports. Our systems
also include a customer portal where shoppers are able to track
their payments, configure payment defaults and connect with various
cryptocurrency exchanges and banks to facilitate payment to
merchants. Merchants are able to integrate a unique pop-up user
interface that allows customers to pay directly from their
ecommerce checkout page with no need to redirect to another website
or web page.
Our
merchant portal is updated instantly when a payment transaction is
made on the merchant’s website. The merchant is notified of the
transaction and can see the transaction details, including the
customer that made the transaction, the transaction amount and the
items purchased. This information is available to the merchant on
its dashboard, where various metrics are tracked and displayed to
the merchant, including information about the various
cryptocurrencies that are used for payments to that merchant, the
different currencies received by the merchant as payment and
transaction details such as the transaction hash. In addition to
various metrics, merchants are able to generate a variety of
reports, and are able to configure various options, including
settlement options, from their portal.
Customers
of merchants that use the RocketFuel payment solution are able to
track their payments in their own online portal. They are also able
to track payments they made to all the merchants that are
integrated with the RocketFuel payment technology within a single
consolidated user portal. They are currently able to connect to
their accounts on Coinbase and in the future we plan to add
connectivity to Binance, Kraken, Gemini and other exchanges.
Customers can also pay from any cryptocurrency wallet, such as
Metamask and Electrum and are able to pay from their bank accounts
as well. These customers are able to make payment with any of these
payment options with 1, 2, or 3 clicks from the merchant checkout
page. By default, these customers can choose from over 100
cryptocurrencies with which to pay.
Our
payment user interface allows customers to easily onboard as well
as to pay for merchants’ products or services with a variety of
cryptocurrencies or via bank transfers. The user interface is
displayed as a stand-alone popup that allows the creation of new
accounts as well as payment directly from crypto exchanges, crypto
wallets, and bank accounts, with no redirects to browser tabs or
pages. This can be integrated as a plugin on the merchant checkout
page or as a browser extension. The plugin, which we are currently
developing, will come integrated with popular ecommerce platforms
including WooCommerce, Shopify, Prestashop and others. The browser
extension is integrated with popular browsers including Chrome,
Chromium, Opera, Firefox, and Edge. The payment interface is
designed for both web and mobile checkout experiences. Merchants
are able to integrate the RocketFuel payment interface to their
checkout page with software development kits (SDKs) that are
available via the merchant portal. Application programming
interfaces (APIs) are also available to the merchant for deeper
integration into backend systems, ERP platforms, and other
third-party platforms.
Our
solution is designed to be implemented on an eCommerce site’s
check-out page. The technology will also be used for different
scenarios, including paying for services, paying invoices, and
other payment strategies. In addition, we anticipate that a future
version of our payment system will allow for advertisements in
which the entire checkout process is embedded to be placed on third
party websites where sales may be completely finalized. Thus, our
technology will enable eCommerce strategies that can include
advertisements with a fully integrated check-out process. We
believe that this has never before been accomplished on any
eCommerce platform. We believe that such advertisements could
provide significant new sales channels to retailers that are simply
not possible with legacy check-out solutions. We also believe that
transactions costs on our system will be significantly less
expensive than the cost of credit-card transactions.
The
RocketFuel check-out solution is designed to operate identically
across merchant channels with all participating merchants.
eCommerce merchants are able to encode their check-out protocol to
support our technology and the merchants will no longer have to
administer complex check-out and payment gateways at their
eCommerce websites. At the same time, consumers are able to
experience enhanced data protection opportunities and significantly
improved convenience.
With
the RocketFuel check-out systems, consumers will no longer have to
enter credit card information or shipping details every time they
want to buy online. Payment and shipping information will be
handled automatically. Using the RocketFuel payment solution,
credit card data will no longer be shared or transmitted and
exposed online. Rather, payments will be made via 100% secure
cryptocurrency conveyance or direct bank transfer on the
blockchain.
Our
corporate headquarters are located in San Francisco,
California.
Critical
Accounting Policies
Our
significant accounting policies are described in Note 2 to the
financial statements as of March 31, 2022 which are included in our
Annual Report on Form 10-K. There were no changes to our
significant accounting policies during the three months ended June
30, 2022 as compared to the significant account policies described
in our Annual Report on Form 10-K for the year ended March 31,
2022. Our discussion and analysis of our financial condition and
results of operations are based upon these financial statements,
which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and judgments
that affect the reported amounts of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and
liabilities. We evaluate our estimates on an on-going basis. We
base our estimates on historical experience and on various other
assumptions that we believe to be reasonable under the
circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. In the past, actual
results have not been materially different from our estimates.
However, results may differ from these estimates under different
assumptions or conditions.
Results
of Operations
For the Three Months Ended June 30, 2022 vs June 30,
2021
Revenues
During
the three months ended June 30, 2022, we recorded revenues of
$8,132 as a result of transaction fees and the recognition of
amortization of deferred setup fee revenues in connection with the
execution of contracts with customers. During the three months
ended June 30, 2021, we recorded revenues of $2,500 for similar
recognition of deferred revenues.
We
anticipate that future revenues will continue to be generated from
(i) fees charged in connection with the implementation of our
blockchain technology; and (ii) ongoing daily transactional fees
derived as a negotiated percentage of the transactional revenues
earned by our merchant customers.
Research
and Development Expenses
Research
and development expenses for the three months ended June 30, 2022
were $258,965 as compared with $326,217 for the prior year period,
a decrease of $67,252. The decrease is primarily a result of a
larger portion of effort of contract developers and the payroll
expenses being directed toward capitalized development of and
improvements in our blockchain technology software for payment
processing.
General
and Administrative Expenses
General
and administrative expenses for the three months ended June 30,
2022 were $1,237,954 as compared with $880,874 for the prior year
period, an increase of $357,080. The increase is primarily a result
of (i) an increase in legal fees of approximately $125,000 incurred
in connection with business development strategies; (ii) increased
payroll and recruiting expenses of approximately $192,000 incurred
in connection with the hiring of certain key management and
technical personnel; and (iii) an increase of approximately $33,000
in finance professional fees in designing and managing accounting
systems to accommodate additional revenue stream
opportunities.
Liquidity
and Capital Resources
We
will require additional financing in order to continue to develop
our product and execute on our business plan. However, there can be
no assurances that we will be successful in raising the additional
capital necessary to continue operations and execute on our
business plan. Any potential future sale of equity or debt
securities may result in dilution to our stockholders, and we
cannot be certain that additional public or private financing will
be available in amounts or on terms acceptable to us, or at all. If
we are required to raise additional financing, but are unable to
obtain such financing, we may be required to delay, reduce the
scope of, or eliminate one or more aspects of our operations or
business development activities.
On
June 30, 2022, we had total assets of $2,116,241 and total
liabilities of $716,401. This compares to total assets of
$3,110,795 and total liabilities of $513,550 on March 31, 2022. As
of June 30, 2022, our assets consisted of $1,492,846 of cash and
restricted cash, $1,362 of accounts receivable, $81,057 of prepaid
and other current assets and $540,976 of property and equipment,
net of depreciation and amortization. The decrease in assets
compared to March 31, 2022 is due to the use of cash to pay for
operating costs as a result of increase business activities,
somewhat offset by the increase in prepaid and other current assets
and the capitalization of software development costs. As of June
30, 2022, our liabilities consist of $657,430 of accounts payable
and accrued expenses, $47,679 due to related parties and $11,292 of
deferred revenue. The increase in liabilities compared to March 31,
2022 is largely due to increases of accounts payables and accrued
expenses with a lesser increase in amounts due to a related
party.
On
June 30, 2022, we had working capital of $858,864 and a
stockholders’ equity of $1,399,840 compared to working capital of
$2,137,069 and stockholders’ equity of $2,597,245 at March 31,
2022. Working capital decreased during the three months ended June
30, 2022 largely due to cash used in operating activities to expand
on the Company’s product offerings and capabilities of its
software. Stockholders’ equity decreased due to the operating loss
for the three-month period ended June 30, 2022, with no additional
private placement funds to offset the operating loss.
As of
June 30, 2022, we had cash and restricted cash of $1,492,846 as
compared to $2,634,794 as of March 31, 2022.
During
the three months ended June 30, 2022, we had net cash of $974,067
used in operating activities, which was composed primarily of (i)
our net loss of $948,728, (ii) a gain from a legal settlement of
$540,059, and (iii) increases in prepaid and other current assets
of $68,707. The cash flows used in operating activities were
partially offset by (i) stock-based compensation of $291,382 in
connection with stock options granted pursuant to the 2018 Stock
Option Plan, (ii) depreciation and amortization of $87,081, (iii)
an increase in accounts payable and accrued expenses of $170,230,
and (iv) an increase in a payable to a related party of $36,402.
During the three months ended June 30, 2021, we had net cash of
$876,340 used in operating activities, which was composed
of our net loss of $1,204,591
and offset by (i)
stock-based compensation of $316,896 and (ii) smaller incremental
increases and decreases to accounts receivable, prepaid expenses
and other current assets, accounts payable and accrued expenses,
payables to related parties and deferred
revenues.
During
the three months ended June 30, 2022, we used cash of $167,881 for
the purchase of property and equipment and the capitalization of
software development costs. There were no such investments during
the three-month period ended June 30, 2021.
During
the three months ended June 30, 2022, we had no cash provided by
financing activities, compared with $582,500 net cash provided by
the issuance of common stock in connection with exercise of common
stock purchase warrants during the three-month period ended June
30, 2021.
Our
financial statements have been presented on the basis that we are a
going concern, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business.
During the three months ended June 30, 2022, we reported a net loss
of $948,728, which included non-cash stock-based compensation of
$291,382 and $540,059 of gain from a legal settlement, and cash
flows used in operating activities of $974,067. These factors,
among others, raise substantial doubt about the ability of the
Company to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
Commitments
We do
not have any long-term commitments as of June 30, 2022.
Subsequent
Events
We entered into a marketing service agreement on July 20, 2022 with
a certain marketing firm whereby the marketing firm provides
various marketing services for us. In connection with this
agreement, we issued 333,943 shares in consideration for the
performance of the services by this firm.
Off-Balance
Sheet Arrangements
As of
June 30, 2022, we did not have any off-balance sheet arrangements
that have, or are reasonably likely to have, a current or future
material effect on our financial condition, results of operations,
liquidity, capital expenditures or capital resources.
Impact
of COVID-19 on Our Business
The
COVID-19 pandemic has resulted, and may continue to result, in
significant economic disruption despite progress made in the
development and distribution of vaccines. It has already disrupted
global travel, supply chains and the labor market and adversely
impacted global commercial activity. Considerable uncertainty still
surrounds COVID-19, the evolution of its variants, its potential
long-term economic effects, as well as the effectiveness of any
responses taken by government authorities and businesses and of
various efforts to inoculate the global population. The travel
restrictions, limits on hours of operations and/or closures of
non-essential businesses, and other efforts to curb the spread of
COVID-19 have significantly disrupted business activity globally
and there is uncertainty as to when these disruptions will fully
subside.
Significant
uncertainty continues to exist concerning the impact of the
COVID-19 pandemic on our customers’ and prospects’ business and
operations in future periods. Although our total revenues for the
three months ended June 30, 2022 were not materially impacted by
COVID- 19, we believe our revenues may be negatively impacted in
future periods until the effects of the pandemic have fully
subsided and the current macroeconomic environment has
substantially recovered. The uncertainty related to COVID-19 may
also result in increased volatility in the financial projections we
use as the basis for estimates and assumptions used in our
financial statements. We have adapted our operations to meet the
challenges of this uncertain and rapidly evolving situation,
including establishing remote working arrangements for our
employees, limiting non-essential business travel, and cancelling
or shifting our customer, employee, and industry events to a
virtual-only format for the foreseeable future. We have not
received any government assistance from various relief packages
available in countries where we operate.
Effects
of the COVID-19 pandemic that may negatively impact our business in
future periods include, but are not limited to: limitations on the
ability of our customers to conduct their business, purchase our
products and services, and make timely payments; curtailed consumer
spending; deferred purchasing decisions; delayed consulting
services implementations; labor shortages and decreases in product
licenses revenues driven by channel partners. We will continue to
actively monitor the nature and extent of the impact to our
business, operating results, and financial condition.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Not
applicable.
Item 4. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
Based
on an evaluation under the supervision and with the participation
of our management, our principal executive officer and principal
financial officer have concluded that our disclosure controls and
procedures as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act were not effective as of June 30, 2022 to ensure that
information required to be disclosed by us in reports that we file
or submit under the Exchange Act is (i) recorded, processed,
summarized and reported within the time periods specified in the
SEC rules and forms and (ii) accumulated and communicated to our
management, including our principal executive officer and principal
financial officer, as appropriate, to allow timely decisions
regarding required disclosure. Based on this evaluation, our
management concluded that, as of June 30, 2022, our internal
controls over financial reporting were not effective.
Changes
in Internal Control Over Financial Reporting
The
following changes have been made in our internal control over
financial reporting (as such term is defined in Rules 13a-15(f)
under the Exchange Act) during the fiscal period to which this
report relates that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.
We
have engaged a new accountant and an independent Controller to
transact and oversee the financial activities of the Company, with
preparation of our public filings by an SEC Manager, each with the
guidance of our SEC Director. These persons are under the purview
of our CFO.
We intend to perform additional internal control improvements,
beginning with written documentation of financial processes.
Inherent
Limitations of the Effectiveness of Internal
Controls
A
control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the
objectives of the internal control system are met. Because of the
inherent limitations of any internal control system, no evaluation
of controls can provide absolute assurance that all control issues,
if any, within a company have been detected.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Other
than as set forth below, we are not the subject of any pending
legal proceedings; and to the knowledge of management, no
proceedings are presently contemplated against us by any federal,
state or local governmental agency. Further, to the knowledge of
management, no director or executive officer is party to any action
in which any has an interest adverse to us.
On
October 8, 2020, we filed a lawsuit in the U.S. District Court for
the Central District of California against Joseph Page, our former
director and chief technology officer. On January 13, 2021, the
case was transferred to the U.S. District Court for the District of
Nevada, Las Vegas Division. The causes of action include securities
fraud under Federal and California law; fraud, breach of fiduciary
duty, negligent misrepresentation and unjust enrichment under
California law; and violation of California Business and
Professions Code §17200 et seq.
On
May 29, 2019, Mr. Page resigned from our board. After his
resignation, we retained independent patent counsel to review our
patent applications. In connection with this review, we discovered
certain deficiencies in some of the applications and in their
assignments to us. We determined that all of the applications had
been abandoned. Based on this review, we decided to refile three of
our applications with the U.S. Patent and Trademark Office, which
we did in May 2020. It is our belief that the three newly filed
patent applications cover and/or disclose the same subject matter
as we disclosed in the five original patent applications. In this
case, our rights may be subject to any intervening patent
applications made after the dates of the original applications. In
the lawsuit, we were alleging that Mr. Page was aware of the
abandonments when he assigned the patents to RocketFuel Blockchain
Company (“RBC”), a private corporation that he controlled, and that
he failed to disclose to us the abandonments when the Company
acquired RBC in exchange for shares of the Company’s Common Stock.
Mr. Page filed an answer denying the Company’s claims and asserted
cross- and counterclaims against the Company and several of the
Company’s shareholders alleging breach of contract and fraud. In
September 2021, Mr. Page voluntarily dismissed all of the
counterclaims against the shareholders.
On June 7, 2022, RBC entered into a settlement agreement in the
legal proceedings between the Company as plaintiff, and Joseph Page
as defendant, whereunder Page surrendered 3,600,394 shares of the
Company’s common stock, and kept 1,500,000 shares. Mr. Page
represents and warrants that he has not filed or assisted anyone
else in filing any patent applications that would preempt or
infringe upon the Company’s patent applications. Plaintiff and
defendant have each released their claims against each other and
covenanted not to sue the other, including related parties and
stakeholders, with the exclusion of current or future claims
against EGS. The parties agreed to a Stipulated Dismissal of the
Action with Prejudice filed with the court. In connection with this
settlement, we recognized a gain of $540,059, calculated based on
the Company’s share price of $0.15 per share on the date of
settlement of the legal proceedings. This gain was recorded in
other income for the three months ended June 30, 2022 in the
accompanying consolidated statements of operations.
On
March 2, 2021, we filed a lawsuit in the U.S. District Court for
the Southern District of New York against Ellenoff Grossman &
Schole LLP (“EGS”) for negligence and legal malpractice, breach of
contract and breach of fiduciary duty. EGS had represented RBC
prior to the Business Combination and represented us after the
closing of the Business Combination through August 2019. In the
litigation against Mr. Page, he has alleged that he provided
information to an EGS partner that the patent applications had been
abandoned and that EGS failed to inform RBC and us of the fact. We
are seeking damages and the return of legal fees previously
paid.
At
the date of this report, the Company is unable to estimate the
probability success or dollar amount of rulings in the March 2,
2021 case against EGS, and as a result, has not accrued any
potential benefit to the Company’s balance sheet. Attorney fees
related to these proceedings are expensed as incurred.
Item 1A. Risk Factors
The
Risk Factors identified in our Annual Report on Form 10-K for the
year ended March 31, 2022 continue to represent the most
significant risks to the Company’s future results of operations and
financial conditions, without further modification or
amendment.
Item 2. Unregistered Sales of Equity
Securities
We
had no placements or sales of the Company’s equity securities
during the three-month period ended June 30, 2022.
Item 6. Exhibits
Exhibit
No.
|
|
Description |
3.1 |
|
Conformed copy of Articles of Incorporation of
RocketFuel Blockchain, Inc., as currently in effect - incorporated
by reference to Exhibit 3.1 to Amendment to Registration Statement
on Form S-1 filed October 20, 2021. |
|
|
|
3.2 |
|
Amended
and Restated Bylaws - incorporated by reference to Exhibit 2.1 to
Form 8-K filed June 9, 2018. |
|
|
|
10.1 |
|
Contribution Agreement by and among the Company,
RocketFuel Blockchain Company, Joseph Page, Gert Funk, PacificWave
Partners Limited, PacificWave Partners UK Ltd. and Saxton Capital
Ltd, dated June 27, 2018 - incorporated by reference to
Exhibit 2.1 to Form 8-K filed June 29, 2018. |
|
|
|
10.2 |
|
Securities Purchase Agreement between Geneva Roth
Remark Holdings, Inc. and RocketFuel Blockchain, Inc., dated August
4, 2021 - incorporated by reference to Exhibit 10.1 to Form 8-K
filed August 10, 2021. |
|
|
|
10.3 |
|
$130,000 Convertible Promissory Note between
Geneva Roth Remark Holdings, Inc. and RocketFuel Blockchain, Inc.,
dated August 4, 2021 - incorporated by reference to Exhibit 10.2 to
Form 8-K filed August 10, 2021. |
|
|
|
10.4 |
|
Amended
and Restated Subscription Agreement dated September 14, 2021
between the Company and G Kapital ApS - incorporated by reference
to Exhibit 10.1 to Form 8-K filed September 15,
2021. |
|
|
|
10.5 |
|
Amendment to Common Stock Purchase Agreement and
Warrant dated October 11, 2021 - incorporated by reference to Exhibit 10.1 to Form
8-K filed October 14, 2021. |
|
|
|
31.1 |
|
Certification
of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. |
|
|
|
31.2 |
|
Certification
of the Principal Financial and Accounting Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1 |
|
Certification
of the Chief Executive Officer Pursuant to 18 U.S.C. 1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. |
|
|
|
32.2 |
|
Certification
of the Chief Financial Officer Pursuant to 18 U.S.C. 1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. |
|
|
|
101.INS |
|
XBRL
Instance Document. |
101.SCH |
|
XBRL
Taxonomy Extension Schema Document. |
101.CAL |
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XBRL
Taxomony Extension Calculation Linkbase Document. |
101.LAB |
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XBRL
Taxonomy Extension Label Linkbase Document. |
101.PRE |
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XBRL
Taxonomy Extension Presentation Linkbase Document. |
101.DEF |
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XBRL
Taxonomy Extension Definition Linkbase Document. |
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
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RocketFuel
Blockchain, Inc. |
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By: |
/s/
Peter M. Jensen |
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Peter
M. Jensen |
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Chief
Executive Officer |
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(Principal
Executive Officer) |
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By: |
/s/
Bennett J. Yankowitz |
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Bennett
J. Yankowitz |
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Chief
Financial Officer |
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(Principal
Financial and Accounting Officer) |
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Dated:
August 18, 2022 |
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Exhibit 31.1
CERTIFICATION
I,
Peter M. Jensen, hereby certify that:
1. I
have reviewed this Quarterly Report on Form 10-Q of RocketFuel
Blockchain, Inc. (the “Company”);
2.
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the Company as of, and for, the
periods presented in this report;
4.
The Company’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Company and have:
a.
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
Company is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
b.
Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
c.
Evaluated the effectiveness of the Company’s disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
d.
Disclosed in this report any change in the Company’s internal
control over financial reporting that occurred during the Company’s
fourth fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company’s internal
control over financial reporting; and
5.
The Company’s other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the Company’s auditors and the audit committee of the
Company’s board of directors (or persons performing the equivalent
functions):
a.
All significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which
are reasonably likely to adversely affect the Company’s ability to
record, process, summarize and report financial information;
and
b.
Any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company’s
internal control over financial reporting.
Date:
August 18, 2022 |
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/s/
Peter M. Jensen |
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Peter
M. Jensen |
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Chief
Executive Officer |
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(Principal
Executive Officer) |
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Exhibit 31.2
CERTIFICATION
I,
Bennett J. Yankowitz, hereby certify that:
1. I
have reviewed this Quarterly Report on Form 10-Q of RocketFuel
Blockchain, Inc. (the “Company”);
2.
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the Company as of, and for, the
periods presented in this report;
4.
The Company’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Company and have:
a.
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
Company is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
b.
Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
c.
Evaluated the effectiveness of the Company’s disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
d.
Disclosed in this report any change in the Company’s internal
control over financial reporting that occurred during the Company’s
fourth fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company’s internal
control over financial reporting; and
5.
The Company’s other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the Company’s auditors and the audit committee of the
Company’s board of directors (or persons performing the equivalent
functions):
a.
All significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which
are reasonably likely to adversely affect the Company’s ability to
record, process, summarize and report financial information;
and
b.
Any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company’s
internal control over financial reporting.
Date:
August 18, 2022 |
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/s/
Bennett J. Yankowitz |
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Bennett
J. Yankowitz |
|
Chief
Financial Officer |
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(Principal
Financial and Accounting Officer) |
|
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report of RocketFuel Blockchain,
Inc., a Nevada corporation (the “Company”), on Form 10-Q for the
period ended June 30, 2022, as filed with the Securities and
Exchange Commission on the date hereof (the “Report”), I, Peter M.
Jensen, Chief Executive Officer of the Company, hereby certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that, to the best of my
knowledge:
(1)
The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
Date:
August 18, 2022 |
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/s/
Peter M. Jensen |
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Peter
M. Jensen |
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Chief
Executive Officer |
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This
certification accompanies each report of the Company on Form 10-Q
and Form 10-K pursuant to §906 of the Sarbanes-Oxley Act of 2002
and shall not, except to the extent required by the Sarbanes-Oxley
Act of 2002, be deemed filed by the Company for purposes of §18 of
the Securities Exchange Act of 1934, as amended.
A
signed original of this written statement required by §906 has been
provided to the Company and will be retained by the Company and
furnished to the Securities and Exchange Commission or its staff
upon request.
Exhibit 32.2
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report of RocketFuel Blockchain,
Inc., a Nevada corporation (the “Company”), on Form 10-Q for the
period ended June 30, 2022, as filed with the Securities and
Exchange Commission on the date hereof (the “Report”), I, Bennett
J. Yankowitz, Chief Financial Officer of the Company, hereby
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of
my knowledge:
(1)
The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
Date:
August 18, 2022 |
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/s/
Bennett J. Yankowitz |
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Bennett
J. Yankowitz |
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Chief
Financial Officer |
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This
certification accompanies each report of the Company on Form 10-Q
and Form 10-K pursuant to §906 of the Sarbanes-Oxley Act of 2002
and shall not, except to the extent required by the Sarbanes-Oxley
Act of 2002, be deemed filed by the Company for purposes of §18 of
the Securities Exchange Act of 1934, as amended.
A
signed original of this written statement required by §906 has been
provided to the Company and will be retained by the Company and
furnished to the Securities and Exchange Commission or its staff
upon request.
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