EXHIBIT A 3 @ Case 2:22-cv-07258-MCA-AME Document 1-4 Filed 12/13/22 Page 1 of 6 PageID: 33 1271 Avenue of the Americas |New York, NY 10020 blankrome.com P h o n e : ( 2 1 2 ) 8 8 5 - 5 3 4 5 F a x : ( 9 1 7 ) 3 3 2 - 3 7 3 6 E m a i l : a n d r e w . h a m b e l t o n @ b l a n k r o m e . c o m August 19, 2022 BY FEDERAL EXPRESS & EMAIL Robert S. Schachter, Esq. Zwerling, Schachter & Zwerling, LLP 41 Madison Avenue New York, NY 10010 rschacter@zsz.com Re: Response to Shareholder Demand Letter Pursuant to Wyo. Stat. Ann. §17-16-742 Dear Mr. Schachter: This Firm represents Zerify, Inc., f/k/a StrikeForce Technologies, Inc. (the “Company”). We write in response to your letter dated June 10, 2022, demanding, on behalf of shareholder Constantine Zanfardino, that the Company investigate various alleged wrongdoings and provide information concerning certain transactions. The Company takes all inquiries by its shareholders, including Mr. Constantine’s demand, seriously. As such, the Company undertook to investigate each of the transactions noted in your letter. Based on the Company’s investigation, the Company is not aware of any wrongdoing by the Company or any of its officers or directors that warrants any further action. Each of the questioned transactions in your letter were fully and properly disclosed in public filings made by the Company. Your letter acknowledges the same by citation to the Company’s previous public filings. While the Company was not under any obligation to provide further information concerning the questioned transactions in any of its public filings, the Company filed on July 18, 2022 a 10-K/A for fiscal year ended December 31, 2021, which provides the additional disclosures related to matters raised in your letter. Below are the specific disclosures made in the 10-K/A: Case 2:22-cv-07258-MCA-AME Document 1-4 Filed 12/13/22 Page 2 of 6 PageID: 34 Robert S. Schachter, Esq. August 19, 2022 Page 2 Requested Disclosure s/Actions Response 1. During the three months ended March 31, 2021, the Directors caused the issuance of 16,168,589 common shares with fair value of $1,035,000 to settle a $45,000 debt. See Company’s Form 10-Q for the first quarter of 2021, at p. 12 Section C, paragraph 2. Who received those shares? These shares of common stock were issued to convertible note holder, Crown Bridge Partners LLC upon the conversion of its $20,000 convertible note in January 2021 and its $25,000 convertible note in March 2021. See 10-K/A for the fiscal year ended December 31, 2021, at Part II, Item 5(D). 2. In February, 2021 the Directors caused the modification of 12,250,000 unvested warrants to be vested with a value of $3,675,000. See Company’s 2021 Form 10-K, p. 36, paragraph 4. Who held those warrants? In February 2021, the Company issued 17,208,335 shares of common stock to three employees upon the cashless exercise of options. One of the employees, Ramarao Pemmaraju, is a member of the Company’s management team and he received 9,833,334 shares of stock. In February 2021, 12,250,000 unvested options granted in fiscal 2020 were modified and such options became fully vested. Pursuant to current accounting guidelines, the Company measured the fair value of these options and determined their fair value to be $3,675,000, which was recorded as stock compensation expense. The portion of the remeasured fair value of the options which was expensed and attributed to Ramarao Pemmaraju was $2,100,000. See 10-K/A for the fiscal year ended December 31, 2021, at Part II, Item 5(D). 3. In March 2021 the Directors caused the issuance of 16,931,437 shares with fair value of $3,239,000 for the cancellation of warrants to purchase 50,000 shares of common stock. See Company’s Form 10- Q for the first quarter of 2021, p. 17. Who received those shares? These shares of common stock were issued to Auctus Fund LLC. See 10-K/A for the fiscal year ended December 31, 2021, at Part II, Item 5(D). Case 2:22-cv-07258-MCA-AME Document 1-4 Filed 12/13/22 Page 3 of 6 PageID: 35 Robert S. Schachter, Esq. August 19, 2022 Page 3 4. The Company’s Form 10 - Q for the first quarter of 2021, shows SG&A increased by more than $5 million for that quarter. See Form 10-Q for the first quarter of 2021, p. 4. For prior years, SG&A averaged about $500,000 a month. What line items of SG&A caused that increase? The increase in SG&A in 2021 was due primarily to an increase in employee stock- based compensation and professional fees. See 10-K/A for the fiscal year ended December 31, 2021, Item 7. 5. The Company granted 45,569,000 shares to a financing entity as part of a financing transaction. The shares were valued at $6,569,000 and expensed and recorded as a finance cost. See Company’s Form 10- Q for the second quarter of 2021, p. 18. Who received the shares? Why and how much money was raised? 45,150,500 shares of common stock were received by Auctus Fund LLC for cashless exercise of warrants held by Auctus Fund LLC for financing services rendered, related to notes payable, and cancellation of warrants. See 10-K/A for the fiscal year ended December 31, 2021, at Part II, Item 5(D) and Notes to Consolidated Financial Statements, p. F-16. 6. During the period ending September 30, 2021, the Company separately issued (i) 17,208,335, (ii) 12,349,726, (iii) 13,557,335, and (iv) 9,189,627 common shares. See Company’s 2021 Form 10-K, p. 36, paragraphs 4 and 5; Company’s 10- Q for the second quarter of 2021, p.18. Why were these shares issued? Who received those shares? The issuance of 17,208,335 shares of common stock was to three employees, including one member of the Company’s management team, upon the cashless exercise of stock options. See 10-K/A for the fiscal year ended December 31, 2021, at Part II, Item 5(D). The issuance of 12,349,726 shares of common stock was to Auctus Fund LLC for financing services rendered, related to notes payable, and cancellation of warrants. See 10-K/A for the fiscal year ended December 31, 2021, at Part II, Item 5(D). The issuance of 13,557,693 shares of common stock was to three employees upon the cashless exercise of stock options. See 10-K/A for the fiscal year ended December 31, 2021, at Part II, Item 5(D). The issuance of 9,189,627 shares of common stock was to George Waller, a member of the Case 2:22-cv-07258-MCA-AME Document 1-4 Filed 12/13/22 Page 4 of 6 PageID: 36 Robert S. Schachter, Esq. August 19, 2022 Page 4 Company’s management team, upon the cashless exercise of stock options. See 10-K/A for the fiscal year ended December 31, 2021, at Part II, Item 5(D). 7. As set forth in the Company’s Form 10-K for the year ended December 31, 2021, and filed with the SEC (the “2021 10K”) Blocksafe Technologies, Inc. (“Blocksafe”) was formed on December 1, 2017 in the State of Wyoming. Blocksafe is in the business of providing total cyber security solutions and is a licensee of StrikeForce for its desktop anti-malware product called “GuardedID®”, which the Company claimed was a “one of a kind mobile application.” During the first quarter of 2021 the Directors issued to themselves 31% of Blocksafe’s stock while all the other shareholders of StrikeForce were diluted. The Board should investigate whether the Directors lined their own pockets in this transaction. The Company reviewed this transaction and found no evidence of any wrongdoing. Moreover, the Company fully disclosed information related to BlockSafe. See 10-K/A for the fiscal year ended December 31, 2021, p. 12-13, Note 1 to the Financial Statements at F-7, Note 7 to the Financial Statements at F- 13, Item 13 at pp. 40-41, and Exhibits 10.10, 10.11, and 10.12. 8. Other transactions need to be investigated such as the acquisition of CyberSecurity Risk Solutions LLC (“CyberSecurity”) and the licensing of the Company’s technology to Cyber Safety to determine if the Directors did not personally gain from these transactions, at the expense of the Company, as they did with the BlockSafe transaction. The Company reviewed these transactions and found no evidence of any wrongdoing. These were not related party transactions, and the agreements were fully disclosed in the Company’s SEC filings. See 10-K/A for fiscal year ended December 31, 2021, at p. 14, Part II, Item 5(D), and Exhibits 10.7, 10.8 and 10.15. 9. The 2021 10-K at page 36, paragraph 4, states that the shares and options the Directors took for themselves cost the Company $3,675,000 and $2,172,000 These cashless exercises of stock options were disclosed. See 10-K/A for fiscal year ended December 31, 2021, Part II, Item 5(D), Note 13 to the Financial Statements at p. F-17, Item Case 2:22-cv-07258-MCA-AME Document 1-4 Filed 12/13/22 Page 5 of 6 PageID: 37 Robert S. Schachter, Esq. August 19, 2022 Page 5 equaling $5,847,000. While the Company had to take this as an expense in its SEC filings, no W-2’s or 1099’s were issued to the Directors. Why was this compensation not disclosed to shareholders? Did this impact SG&A for the first quarter of 2021 of over $5,000,000? 12 at p. 37. As for the impact on SG&A, please see response to Request No. 4 above. Because neither the Company, nor any of its officers or directors has engaged in any wrongdoing in connection with any of the transactions noted in your letter, no further action is warranted, and the Company hereby rejects any suggestion by Mr. Zanfardino that the Company take any further action. Furthermore, because of the disclosures made by the Company in its SEC filings, including its 10-K/A for the fiscal year ended December 31, 2021, we trust that Mr. Zanfardino’s inquiries are now satisfied and that this matter is closed. Should you have any questions, please do not hesitate to contact me at (212) 885-5345 or via email at andrew.hambelton@blankrome.com. Very truly yours, Andrew T. Hambelton Andrew T. Hambelton cc: Daniel E. Rhynhart, Esq. Case 2:22-cv-07258-MCA-AME Document 1-4 Filed 12/13/22 Page 6 of 6 PageID: 38