Inside transfer wipes out $1M executive debt as crypto firm offloads payments business without independent valuation
RocketFuel Blockchain transferred considerably all belongings utilized in its payments business to RPay, whose sole director and CEO, Peter M. Jensen, additionally serves as a RocketFuel director and executive officer.
The related-person deal closed Aug. 13 and was disclosed in an Aug. 21 regulatory filing. RocketFuel stated the assets used primarily in payments included mental property, contracts, service provider relationships and different belongings, along with money and accounts receivable attributable to that business.
The disclosed consideration centered on debt aid. RPay assumed $800,000 in deferred compensation that RocketFuel owed Jensen and $200,000 owed to Bennett J. Yankowitz, a former RocketFuel director and executive who remained on its advisory board. RocketFuel was launched from each obligations at closing.
The submitting’s consideration part didn’t listing a money fee to RocketFuel. It described consideration obtained by the corporate, not a distribution to its stockholders.
RocketFuel additionally obtained a warrant to buy 160,000 RPay widespread shares. The warrant is topic to a $1 million repurchase proper exercisable by RPay at any time, that means the submitting didn’t describe RocketFuel as receiving both the underlying shares or $1 million in money at closing.
RocketFuel stated Jensen’s pursuits differed from these of stockholders usually, citing the idea of his compensation declare and the warrant phrases. Yankowitz’s assumed obligation is payable at $0.25 for every $1 paid to Jensen, on the discretion of RPay’s board.
RocketFuel’s board decided {that a} stockholder vote was not required beneath NRS 78.565. The firm stated the board authorized the transaction utilizing a equity memorandum that addressed the disclosed conflicts, reasonably than acquiring an independent valuation or stockholder ratification.
The closing disclosure differs from a March non-binding term sheet overlaying proposed gross sales to RPay and RPoints, the proposed purchaser of RocketFuel’s loyalty and rewards business. That preliminary two-buyer bundle contemplated about $1.5 million in deferred-compensation assumptions, a payments-revenue earn-out and warrants for 20% absolutely diluted stakes in each firms. A separate RPoints submitting was not seen in RocketFuel’s Aug. 22 SEC submissions, so these mixed preliminary phrases can’t be in contrast with the RPay-only bundle as in the event that they coated the identical scope.
The full monetary impact stays unresolved. RocketFuel known as the RPay sale a major disposition beneath SEC asset and earnings assessments, however its Aug. 21 submitting didn’t embrace the required unaudited professional forma financials. The firm stated it will present them in a later Form 8-Ok/A; its SEC submissions history confirmed no such modification as of Aug. 22.
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