Item
1.01 Entry into a Material Definitive Agreement.
On
January 13, 2023, RocketFuel Blockchain Inc. (the “Company”) completed a private placement (the “Offering”) of
$150,000 principal amount of its secured convertible promissory notes (the “Notes”). The purchase price was $150,000. There
were three purchasers, including Gert Funk, the Company’s Chairman, and Peter M. Jensen, the Company’s Chief Executive Officer
and a member of its Board of Directors. The third purchaser was a private investor. Each investor purchased a Note for $50,000.
The
Notes bear interest at 10% per annum and mature on July 13, 2023 (the “Maturity Date”). The Notes may be prepaid by the Company
at any time. If the Company shall prepay the entire outstanding principal amount of a Note on or before April 13, 2023, then there
is no prepayment premium. If the Company shall prepay the entire outstanding principal amount of a Note between April 14, 2023 and
the Maturity Date, then it shall also pay accrued interest on such principal amount in an amount equal to 50% of such principal amount.
If the Company shall repay the outstanding principal amount of a Note on or after the Maturity Date, then it shall also pay accrued interest
on such principal amount in an amount equal to 100% of such principal amount.
The
Notes are convertible into shares of the Company’s Series A Preferred Stock (“Series A Preferred”) at a conversion
price equal to (a) the outstanding principal amount of, plus all accrued interest on, the Note divided by (b) $0.2065. The conversion
price is subject to adjustment for certain stock splits, recapitalizations and other similar events. The Notes are secured by a security
interest in all of the Company’s assets.
Up
to 1,000,000 shares of Series A Preferred were approved by the Board. The Series A Preferred has a 200% liquidation preference over the
common stock and any other future series of preferred stock, payable in the event of a liquidation or merger of the Company. In such
event, the holders of the Series A Preferred will be entitled to a priority distribution equal to 200% of the deemed issue price of $0.2065
per share, (i.e., $0.4130 per share). The Series A Preferred is convertible at the option of the stockholder into shares
of common stock at a conversion price of $0.2065 per share, subject to adjustment for certain stock splits, recapitalizations
and other similar events.
On
January 13, 2023, in connection with the Offering, the Company entered into a Convertible Notes Subscription Agreement (the “Subscription
Agreement”) with three investors. The Subscription Agreement sets forth the economic terms set forth above.
The
Company intends to use the $150,000 net proceeds of the Offering for general corporate purposes and to fund ongoing operations and expansion
of its business.
The
form of Subscription Agreement, the Certificate of Designation for the Series A Preferred and the form of Note are filed as Exhibits
10.1, 3.1, and 4.1, respectively, to this Current Report on Form 8-K. The foregoing summaries of the terms of these documents
are subject to, and qualified in their entirety by, such documents, which are incorporated herein by reference.
The
representations, warranties and covenants contained in the Subscription Agreement were made only for purposes of such agreement and as
of specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution
of the Subscription Agreement. The representations and warranties may have been made for the purposes of allocating contractual risk
between the parties to the agreement instead of establishing these matters as facts and may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to investors. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Subscription Agreement, and this subsequent information may or may not
be fully reflected in the Company’s public disclosures.
The Notes, the shares of Series A Preferred
to be issued upon conversion of the Notes and the shares of common stock to be issued upon conversion of the Series A Preferred sold
in the private placement and to be issued have not been registered under the Securities Act of 1933, as amended (the “Securities
Act”), or any state or other applicable jurisdiction’s securities laws, and may not be offered or sold in the United States
absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other
jurisdiction’s securities laws.
This
current report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or jurisdiction.