Overview



Our Corporate History

On June 27, 2018 (the "Closing Date"), RocketFuel Blockchain Company ("RBC") and B4MC Gold Mines, Inc., a Nevada Corporation ("B4MC" or the "Purchaser"), consummated the transactions contemplated by that certain Contribution Agreement (the "Contribution Agreement") made and entered into as of June 27, 2018 by and among RBC, the Purchaser and Gert Funk, Joseph Page, PacificWave Partners Limited, PacificWave Partners UK Ltd. and Saxton Capital Ltd (collectively referred to herein as the "Sellers", individually each a "Seller").

Pursuant to the Contribution Agreement the Sellers contributed, transferred, assigned and conveyed to B4MC all right, title and interest in and to one hundred percent (100%) of the issued and outstanding Common Stock of RBC for an aggregate of 17,001,312 shares of Common Stock, par value $0.001 per share, of B4MC (the "Purchaser Common Stock"), (such transaction, the "Business Combination"). As a result of the Business Combination, RBC became a 100% wholly owned subsidiary of B4MC. In September 2018 B4MC changed its name to RocketFuel Blockchain, Inc. References to "we" and similar terms in this report are to B4MC after the consummation of the Business Transaction.

Prior to the Business Combination, B4MC was a "shell company," as such term is defined in Rule 12b-2 under the Exchange Act. As a result of the Business Combination, we have ceased to be a "shell company."

The Business Combination was treated as a "reverse acquisition" of RBC for financial accounting purposes. RBC was considered the acquirer for accounting purposes, and the historical financial statements of BFMC before the Business Combination were replaced with the historical financial statements of RBC before the Business Combination in all future filings with the SEC. The Purchaser Common Stock issued to the Sellers in connection with the Business Combination have not been registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(a)(2), which exempts transactions by an issuer not involving any public offering, Regulation D and/or Regulation S promulgated by the SEC under that section. These shares may not be offered or sold in the United States absent registration or an applicable exemption from registration. In this report, references to RocketFuel, the "Company," "we" and similar terms are to B4MC following the consummation of the reverse acquisition. In September 2018 B4MC changed its name to RocketFuel Blockchain, Inc.

The foregoing description of the Contribution Agreement does not purport to be complete. For further information, please refer to the copy of the Contribution Agreement included as Exhibit 2.1 to the Current Report on Form 8-K which was filed with the SEC on June 29, 2018. There are representations and warranties contained in the Contribution Agreement that were made by the parties to each other as of the date of execution. The assertions embodied in these representations and warranties were made solely for purposes of the Contribution Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating their terms. Moreover, some representations and warranties may not be accurate or complete as of any specified date because they are subject to a contractual standard of materiality that is different from certain standards generally applicable to shareholders or were used for the purpose of allocating risk between the parties rather than establishing matters as facts. For these reasons, investors should not rely on the representations and warranties in the Contribution Agreement as statements of factual information.





Our Business

We provide 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 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. They 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.





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Our merchant portal is updated instantly when a payment transaction is made on the merchant 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 transaction items. This information is added to the merchant 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 and the different currencies received by the merchant as payment. In addition to various metrics, merchants are able to see 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 online portal. They are also able to track payments they made to all the merchants that are integrated with the RocketFuel payment technology within one 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 to pay directly from bank accounts. They can also pay from any cryptocurrency wallet. Customers are able to pay from 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 dozens of cryptocurrencies to pay from.

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 comes 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.

The RocketFuel payment solution utilizes a variety of blockchains in its execution including Bitcoin, Ethereum and others where the payment transactions are stored. A significant benefit of this technology is that the entire shopping cart checkout process will be accomplished via a distributed ledger or "blockchain," meaning that merchant websites will no longer required to operate complex payment and check-out infrastructures.

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 check-out process is embedded on third party websites where sales may be completely finalized. Thus, our technology could enable eCommerce strategies that can include advertisements with a fully integrated check-out process. We believe that this has never before been accomplished in any eCommerce arrangement. We believe that such advertisements will 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 "single-click" RocketFuel check-out solution is based on a streamlined one- to-three-click check-out process for eCommerce purchases. The system 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.





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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 summarized in Note 3 to our financial statements. Certain of our accounting policies require the application of significant judgment by our management, and such judgments are reflected in the amounts reported in our financial statements. In applying these policies, our management uses its judgment to determine the appropriate assumptions to be used in the determination of estimates. Those estimates are based on our historical experience, terms of existing contracts, our observance of market trends, information provided by our strategic partners and information available from other outside sources, as appropriate. Actual results may differ significantly from the estimates contained in our financial statements.





Results of Operations

Fiscal Years Ended March 31, 2021 vs. March 31, 2020





Revenues

During the three month period ended March 31, 2021, we commenced commercial operations and executed a contract with one customer having a one-year term from the date of execution (the "Contract Term"), which was March 31, 2021, that provided for the payment of $10,000 in connection with the implementation of our blockchain technology. In addition, the Contract Term provided for transaction processing using our blockchain technology with no fees during the Contract Term as an inducement to adopt our blockchain technology. We recorded the $10,000 fee as deferred revenue which will be amortized ratably over the Contract Term. During the fiscal year ended March 31, 2020, we did not generate any revenue and had not yet commenced commercial operations. We anticipate that future 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.

Research and Development Expenses

Research and development expenses for the fiscal year ended March 31, 2021 were $163,405 as compared to $3,390 for the comparable prior year period, an increase of $160,015. The increase is primarily a result of the engagement of contract developers and the payroll expenses incurred in connection with the hiring of our full-time chief technology officer, all of whom were engaged in continued development of our blockchain technology for payment processing.

General and Administrative Expenses

General and administrative expenses for the fiscal year ended March 31, 2021 were $2,200,177 as compared to $121,649 for the comparable prior year period, an increase of $2,078,528. The increase is primarily a result of (i) legal fees incurred in connection with certain litigation costs and payroll expenses incurred in connection with the hiring of our full-time chief executive officer, and (ii) stock-based compensation.

Stock-based compensation for the fiscal year ended March 31, 2021 of $1,622,335 was composed of (i) the $162,000 value of 150,000 shares of our common stock issued to an independent consultant for services in lieu of cash consideration; (ii) stock options granted to employees which were valued at $1,090,204; (iii) the issuance of a warrant to our chief executive officer that is exercisable into 265,982 shares of our common stock and valued at $370,131; and the (iv) repricing of certain stock options granted to our chief financial officer in August 2018 which were re-priced resulting in additional stock-based compensation of $489,064.

Liquidity and Capital Resources

As of March 31, 2021, we had cash of $800,331, an increase of $792,493 as compared to a cash balance of $7,838 as of March 31, 2020. Our current cash requirements are approximately $200,000 per month.





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During the fiscal year ended March 31, 2021, net cash of $636,257 was used in operating activities. Net cash used in operating activities was primarily composed of our net loss of $2,363,582 and offset by (i) $1,460,335 of non-cash stock-based compensation in connection with the grant of employee stock options and issuance of a common stock purchase warrant to our chief executive officer; (ii) $162,000 of non-cash stock-based compensation in connection with the issuance of 150,000 shares of our common stock to a consultant for services in lieu of cash consideration; and (iii) increase in accounts payable, accrued expenses and related party payable of $109,990 in the aggregate.

During the fiscal year ended March 31, 2021, net cash of $1,428,750 was provided by financing activities from the issuance of 1,478,750 shares of our common stock to two investors. During the fiscal year ended March 31, 2020, net cash of $121,250 was provided by financing activities from the issuance of 121,250 shares of our common stock in consideration of $121,250 in gross cash proceeds.

There were no options exercised during the fiscal year ended March 31, 2021 and no options or warrants exercised during the fiscal year ended March 31, 2020. During the fiscal year ended March 31, 2021, one investor exercised warrants to purchase 1,100,000 shares of our common stock of which (i) 1,000,000 shares of our common stock were issued in consideration of gross proceeds of $1,000,000 prior to March 31, 2021; and (ii) 100,000 shares of our common stock, for which we received notice of exercise on March 31, 2021, were issued subsequent to March 31, 2021 in consideration of gross proceeds of $100,000.

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 fiscal year ended March 31, 2021, we reported a net loss of $2,363,582, which included non-cash stock-based compensation of $1,622,335, and cash flows used in operating activities of $636,257. As a result, management believes that there is substantial doubt about our ability to continue as a going concern.

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.

Off-Balance Sheet Arrangements

As of March 31, 2021, 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.

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