Zerify Inc (ZRFY)

[BettingAngles]

NO TOXIC DEBT?? Conman Kay GAVE AWAY THE PATENTS!! Talk about a deal with the devil. If this jerk cured cancer, the stock would still be a half penny stock:

Note 3 – Convertible Notes Payable:

a)
At March 31, 2016, $542,588 in aggregate principal amount of the DART/Citco Global debentures was issued and outstanding and are secured through the note holder's claim on the Company's intellectual property. The secured convertible debentures are past maturity. Due to the adjustable conversion price feature of the secured convertible debentures, our obligation to issue shares upon conversion of the secured convertible debentures owed to DART is potentially limitless. DART did not process any conversions in fiscal 2016 or 2015, and the Company has been in contact with the note holder who has indicated that it has no present intention of exercising its right to convert the debentures into shares of the Company's common stock. In connection with the secured convertible debentures with DART/Citco Global, we granted DART/Citco Global a secured interest in all of our assets. Under the terms of the secured debentures, we are restricted in our ability to issue additional securities as long as any portion of the principal or interest on the secured debentures remains outstanding. During 2016 or 2015, we did not obtain DART/Citco Global's written consent related to any of our financing agreements.
(b)
Convertible notes payable consisted of fourteen unsecured convertible notes ranging in interest rates of 0% per annum to 18% per annum. The notes are convertible at a fixed amount into 14 shares of the Company's common stock, at fixed per share amounts ranging from $1,950,000 to $9,750,000,000 per share, as defined in the agreements. The notes were due in various dates through 2015 and are all currently in default. The Company is currently pursuing settlements with certain of the holders.
At December 31, 2015, the balance of the accrued interest on the unsecured convertible notes with fixed conversion features was $932,272. During the interim period ended March 31, 2016, interest expense of $20,082 was recorded, and at March 31, 2016, the balance of accrued interest on unsecured convertible notes with fixed conversion features was $954,352.

(c)
The Notes are convertible into shares of Common Stock of the Company at the option of the holder commencing on various dates following the issuance date of the Notes and ending on the later of the maturity date or date of full payment of principal and interest. The principal amount of the note along with, at the holder's option, any unpaid interest and penalties, is convertible at a price per share discount of 40% of the Company's Common Stock trading market price during a certain time period, as defined in the agreement. In addition, the conversion price is subject to adjustment in certain events, such as in conjunction with any sale, conveyance or disposition of all or substantially all of the Company's assets or consummation of a transaction or series of related transactions in which the Company is not the surviving entity. The Company considered the current FASB guidance of "Contracts in Entity's Own Stock" and determined that the conversion prices of the Notes were not a fixed amount because they were subject to an adjustment based on the occurrence of future offerings or events and accounted for as derivative liability upon issuance in prior periods (see Note 7).

At December 31, 2015, the balance of the unsecured convertible notes with adjustable conversion features was $824,861. During the interim period ended March 31, 2016, the Company repaid a total of $613,351 of unsecured convertible notes principal. In addition, note holders converted an aggregate of $143,123 of unsecured convertible note principal. At March 31, 2016, the balance of unsecured convertible notes with adjustable conversion features was $68,387 and pertains to one unsecured convertible note which was repaid in April 2016.


11


At December 31, 2015, the balance of the accrued interest on the unsecured convertible notes with adjustable conversion features was $296,396. During the interim period ended March 31, 2016, the Company repaid a total of $147,829 of accrued interest, and note holders converted an aggregate of $37,968 of accrued interest into shares of common stock. During the interim period ended March 31, 2016, interest expense of $16,702 was recorded. Additionally, accrued interest of $15,843 was forgiven and written-off . At March 31, 2016, the balance of accrued interest on unsecured convertible notes payable with adjustable conversion features was $111,458.

During the interim period ended March 31, 2016, a total of $181,071 principal and accrued interest on unsecured convertible notes with adjustable conversion features was converted into 1,394,298,115 shares of the Company's common stock at conversion prices ranging from $0.000058 to $0.0008 per share. In addition, 397,937,526 shares of common stock were issued with a fair value of $239,153 as additional interest to certain note holders.

At March 31, 2016 and December 31, 2015, accrued interest due for all convertible notes was $1,064,082 and $1,228,668, respectively, and is included in accrued interest in the accompanying balance sheets. Interest expense for all convertible notes payable for the interim period ended March 31, 2016 and 2015 was $36,784 and $52,213, respectively.

Note 4 – Convertible Notes Payable – Related Parties

Convertible notes payable - related parties consisted of twelve unsecured convertible notes payable: six to the Company's Chief Executive Officer, for $268,000, at a compounded interest rate of 8% per annum; two to the Company's VP of Technology, for $57,500, interest ranging from prime plus 2% to prime plus 4% per annum; and four to a Developer who is the spouse of the Company's Chief Technology Officer, for $30,000, at a compounded interest rate of 8% per annum. All of the notes are convertible at a fixed conversion price of $9,750,000,000 per share, as defined in the agreements, and have extended due dates of December 31, 2016. The balance of the outstanding convertible notes payable - related parties was $355,500 and $355,500 as of March 31, 2016 and December 31, 2015, respectively. At March 31, 2016, all convertible notes payable-related parties are current liabilities.

At March 31, 2016 and December 31, 2015, accrued interest due for the convertible notes – related parties was $404,448 and $391,001, respectively, and is included in accrued expenses in the accompanying balance sheets. Interest expense for convertible notes payable – related parties for the interim period ended March 31, 2016 and 2015 was $13,447 and $12,252, respectively.

This CEO Mark Kay is lying through his teeth to fund his ATM!!

http://www.otcmarkets.com/stock/SFOR/filings