ROCKETFUEL BLOCKCHAIN, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

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02/13/2020 | 08:38 pm

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 those discussed under "Risk Factors," "Management's
Discussion and Analysis" and "Business." 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 the other documents that we file with the Securities and Exchange
Commission
. You can read these documents at www.sec.gov.






Overview




RocketFuel was formed on January 12, 2018 for the purpose of bringing highly
efficient check-out systems to eCommerce. We are currently developing innovative
check-out systems based upon blockchain technology and designed to increase
speed, security, and ease of use. We believe that users of RocketFuel's systems
will enjoy a seamless check-out experience compared to current online shopping
solutions. We believe that with RocketFuel's technology, online merchants will
be able to implement new impulse buying schemes that are unavailable in present
day eCommerce sites.



On June 27, 2018, we consummated the Business Combination and related
transactions contemplated by the Contribution Agreement. Pursuant to the
Contribution Agreement, B4MC issued 17,001,312 shares of its $0.001 par value
common stock to the Sellers in exchange for a 100% ownership interest in us,
resulting in 22,668,416 post-merger shares of B4MC common stock issued and
outstanding.



On June 29, 2018, we filed a Current Report on Form 8-K with the Securities and
Exchange Commission
which fully describes the transaction set forth herein.






Critical Accounting Policies




Our significant accounting policies are described in Note 3 to the financial
statements as of March 31, 2019 which are included in our Annual Report on Form
10-K. 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.






10







Results of Operations




For the Three Months Ended December 31, 2019 vs December 31, 2018






Revenues




We had no revenue generating operations during the three months ended December
31, 2019
and 2018.



General and Administrative Expenses



General and administrative expenses for the three months ended December 31, 2019
were $36,719 as compared with $80,555 for the prior year period, a decrease of
$43,836 or 54.4%. The decrease is primarily a result of the recording of $50,000
in stock-based compensation during the three months ended December 31, 2018 for
services provided by a consultant which did not reoccur during the three months
ended December 31, 2019.



For the Nine Months Ended December 31, 2019 vs December 31, 2018






Revenues




We had no revenue generating operations during the nine months ended December
31, 2019
and 2018.



General and Administrative Expenses



General and administrative expenses for the nine months ended December 31, 2019
were $105,807 as compared with $3,329,632 for the prior year period, a decrease
of $3,223,825 or 96.9%. The decrease is primarily a result of the recording of
$3,204,208 in stock-based compensation for stock options to our chief financial
officer and a consultant for services during the nine months ended December 31,
2018
.



Liquidity and Capital Resources



As of December 31, 2019, we had cash of $5,807 as compared to $19,486 as of
March 31, 2019.



During the nine months ended December 31, 2019, we had net cash of $113,679 used
in operating activities, which was composed of our net loss of $105,807 and a
decrease in accounts payable and accrued expenses of $7,872. During the nine
months ended December 31, 2018, we had net cash of $2,220 used in operating
activities, which was composed of our net loss of $3,329,632 and offset by (i)
the recording of $3,204,209 in stock-based compensation for stock options to our
chief financial officer and a consultant for services; and (ii) an increase in
accounts payable and accrued expenses of $127,643 primarily for legal and
accounting fees and the effect of the reverse merger transaction.



During the nine months ended December 31, 2019, we had net cash of $100,000
provided by financing activities from the issuance of 100,000 shares of our
common stock to an investor. During the nine months ended December 31, 2018, we
had net cash of $29,695 provided by financing activities, which was composed of
(i) the repayment of $305 of related party advances, and (ii) the issuance of
7,500 shares of our common stock to one investor in consideration of $30,000 in
cash.



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. We incorporated our business on
January 12, 2018. During the nine months ended December 31, 2019, we reported a
net loss of $105,807 and negative cash flows of $113,679 from operating
activities. As of December 31, 2019, we reported negative working capital of
$64,495. As a result, management believes that there is substantial doubt about
our ability to continue as a going concern.



Prior to June 27, 2018, management was engaged in efforts to identify and
negotiate a transaction with a public company quoted on the OTC Markets having
shell status where a contemplated transaction would be treated as a reverse
merger. On June 27, 2018, we consummated a transaction as contemplated by that
certain Contribution Agreement made and entered into as of June 27, 2018 by and
among B4MC Gold Mines, Inc. ("B4MC"), a Nevada corporation, and us. Pursuant to
the Contribution Agreement, B4MC issued 17,001,312 shares of its $0.001 par
value common stock to us in exchange for a 100% ownership interest in us
resulting in 22,668,416 post-merger shares of B4MC common stock issued and
outstanding. We financed our efforts to consummate this reverse merger
transaction through the issuance of equity securities. In October 2018, we
issued (i) 12,500 shares of our common stock, having a fair market value of
$4.00 per share, or $50,000, in consideration for business advisory services,
including research distribution services; and (ii) 1,250 shares of our common
stock to an investor (the "Investor") at $4.00 per share in consideration for
$5,000 in cash. In November 2018, we issued an additional 6,250 shares of our
common stock to the Investor at $4.00 per share in consideration for $25,000 in
cash. 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.






11







Commitments




We do not have any long-term commitments at December 31, 2019.



Off-Balance Sheet Arrangements



At December 31, 2019, we did not have any transactions, obligations or
relationships that could be considered off-balance sheet arrangements.

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