ZRFY Zerify Inc (CE)

Item 1.01 Entry into a Material Definitive Agreement.

On May 6, 2022, we issued warrants to purchase up to an aggregate of 50,000,000 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), which have an exercise price per share of $0.02 (the “Existing Warrants”). The Existing Warrants were immediately exercisable and are set to expire on May 6, 2027.

On August 23, 2022, the Company entered into Inducement Offer to Exercise Common Stock Purchase Warrants letter Agreements (the “Exercise Agreements”) with certain of the holders of the Existing Warrants to purchase an aggregate of 50,000,000 shares of Common Stock (the “Exercising Holders”). Pursuant to the Exercise Agreements, the Exercising Holders and the Company agreed that, subject to any applicable beneficial ownership limitations, the Exercising Holders would exercise their Existing Warrants (the “Investor Warrants”) for shares of Common Stock underlying such Existing Warrants (the “Exercised Shares”) at a reduced exercise price of $0.01 per share of Common Stock. In order to induce the Exercising Holders to cash exercise the Investor Warrants, the Exercise Agreements provide for the issuance of new warrants to purchase up to an aggregate of 50,000,000 shares of Common Stock (the “New Warrants”), with such New Warrants to be issued in an amount equal to the number of the Exercised Shares underlying any Investor Warrants. The New Warrants are exercisable after issuance, provide for a cashless exercise provision if the shares of Common Stock underlying the New Warrants are not registered and terminate on the date that is five years following the issuance of the New Warrants. The New Warrants have an exercise price per share of $0.01.

The New Warrants and the shares of Common Stock issuable upon the exercise of the New Warrants are not being registered under the Securities Act, and are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act. The Exercised Shares are registered for resale on effective registration statements previously filed with the Securities and Exchange Commission.

The Investor Warrants were exercised contemporaneously with the execution of the Exercise Agreements. Assuming full exercise of the Investor Warrants and subject to the Exercise Agreements, the Company expects to receive aggregate gross proceeds of $500,000 from the cash exercise of the Investor Warrants by the Exercising Holders and issue an aggregate of 50,000,000 shares of Common Stock and New Warrants to purchase an aggregate of 50,000,000 shares of Common Stock to the Exercising Holders.

The description of terms and conditions of the New Warrants and the Exercise Agreements set forth herein do not purport to be complete and are qualified in their entirety by reference to the full text of the forms of New Warrant and Exercise Agreements, copies of which are attached as Exhibits 4.1 and 10.1 respectively, to this Current Report on Form 8-K and incorporated herein by reference.