RocketFuel transfers payments assets to CEO-run RPay for $1M debt relief
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RocketFuel Blockchain transferred substantially all assets of its payments business to RPay, a company run by its director and CEO Peter M. Jensen, in a deal closed Aug. 13. RPay assumed $1 million in RocketFuel liabilities, including $800,000 owed to Jensen and $200,000 owed to former director Bennett J. Yankowitz. RocketFuel received a warrant for 160,000 RPay shares subject to a $1 million repurchase right, while pro forma financials remain outstanding.
Key Facts
- RPay assumed $800,000 in deferred compensation owed to RocketFuel director and CEO Peter M. Jensen and $200,000 owed to former director Bennett J. Yankowitz.
- RocketFuel received a warrant to purchase 160,000 RPay common shares, subject to a $1 million repurchase right exercisable by RPay at any time.
- The deal closed Aug. 13 and was disclosed in an Aug. 21 regulatory filing.
- RocketFuel's board approved the transaction using a fairness memorandum rather than obtaining an independent valuation or stockholder ratification.
- RocketFuel has yet to file the pro forma financials required after calling the sale a significant disposition.
Transaction Details
RocketFuel transferred substantially all assets used in its payments business to RPay, whose sole director and CEO, Peter M. Jensen, also serves as a RocketFuel director and executive officer. The assets included intellectual property, contracts, merchant relationships, cash, and accounts receivable attributable to the payments business. The disclosed consideration centered on debt relief: RPay assumed $800,000 in deferred compensation owed to Jensen and $200,000 owed to Bennett J. Yankowitz, a former RocketFuel director and executive who remained on its advisory board. RocketFuel was released from both obligations at closing. The filing's consideration section did not list a cash payment to RocketFuel and described consideration received by the company, not a distribution to stockholders.
Warrant and Conflicts
RocketFuel received a warrant to purchase 160,000 RPay common shares, subject to a $1 million repurchase right exercisable by RPay at any time. The filing did not describe RocketFuel as receiving either the underlying shares or $1 million in cash at closing. RocketFuel said Jensen's interests differed from those of stockholders generally, citing the assumption of his compensation claim and the warrant terms. Yankowitz's assumed obligation is payable at $0.25 for each $1 paid to Jensen, at the discretion of RPay's board. RocketFuel's board determined that a stockholder vote was not required under NRS 78.565.
Approval and Disclosure
The board approved the transaction using a fairness memorandum that addressed the disclosed conflicts, rather than obtaining an independent valuation or stockholder ratification. The final disclosure differs from a March non-binding term sheet covering proposed sales to RPay and RPoints, the proposed buyer of RocketFuel's loyalty and rewards business. That preliminary two-buyer package contemplated about $1.5 million in deferred-compensation assumptions, a payments-revenue earn-out, and warrants for 20% fully diluted stakes in both companies. A separate RPoints filing was not visible in RocketFuel's Aug. 22 SEC submissions, so those combined preliminary terms cannot be compared with the RPay-only package as if they covered the same scope. RocketFuel has yet to file the pro forma financials required after calling the sale a significant disposition.
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RocketFuel transfers payments assets to CEO-run RPay for $1M debt relief
