Item
8.01 Other Events.
As
previously disclosed in the Current Report on Form 8-K filed by 7GC & Co. Holdings Inc. (“7GC”) with the Securities
and Exchange Commission (the “SEC”) on December 8, 2022, 7GC entered into an Agreement and Plan of Merger and Reorganization
(the “Merger Agreement”), with Banzai International Inc., a Delaware corporation (the “Company”),
and the other parties thereto, pursuant to which, the parties thereto will enter into a business combination transaction (the “Business
Combination” and together with the other transactions contemplated by the Merger Agreement, the “Transactions”),
pursuant to which, among other things, through a series of mergers, the Company will become a wholly owned subsidiary of 7GC.
Also as previously disclosed
in the Current Report on Form 8-K filed by 7GC with the SEC on December 8, 2022, prior to the execution and delivery of the Merger Agreement,
on December 8, 2022, the Company entered into that certain Agreement and Plan of Merger (the “Hyros Purchase Agreement”),
by and among the Company, Hero Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (the “Hyros
Merger Sub”), Hyros Inc, a Delaware corporation (“Hyros”), and the stockholder representative party thereto
(the “Stockholder Representative”), pursuant to which, Hyros Merger Sub will be merged with and into Hyros and Hyros
shall continue as the surviving company and as a wholly owned subsidiary of the Company (the “Hyros Acquisition”).
The closing of the Transactions is conditioned on the consummation of the Hyros Acquisition.
In connection with the Hyros
Acquisition, on May 3, 2023, the Company, Hyros Merger Sub, Hyros, and the Stockholder Representative entered into a Side Letter, pursuant
to which the parties agreed that:
| ● | the
Company will not, without the prior express written consent of Hyros and the Stockholder
Representative, directly or indirectly amend, modify or waive, in whole or in part, (i) the
“Minimum Cash Condition” contained in Section 6.3(d) of the Merger Agreement
or (ii) the definition of “Aggregate 7GC Transaction Proceeds” in Section 1.1
of the Merger Agreement; |
| ● | none
of the parties to the Hyros Purchase Agreement (other than the Company) or stockholder of
Hyros prior to the closing of the Hyros Acquisition will have the right to determine whether
any of the conditions to closing set forth in Article 6 of the Merger Agreement have been
satisfied; and |
| ● | the
provisions of the Hyros Purchase Agreement requiring the redemption in cash of former Hyros
stockholders in certain circumstances during the 90-day period following the closing of the
Hyros Acquisition and consummation of the Business Combination will be amended and restated
in their entirety to provide for the following: |
| o | following
the consummation of the Transactions, if 7GC’s (as the relevant surviving company following
the consummation of the Transactions) then available Distributable Free Cash (as defined
below) is greater than $0, for a period of 90 days following the closing of the Hyros Acquisition,
then the Stockholder Representative will have the right to require that 7GC redeem, from
each former Hyros stockholder, the number of whole shares of 7GC then held by such former
Hyros stockholder for payment of an amount in cash calculated in accordance with the Hyros
Purchase Agreement (the “Redemption Cash Payment”), provided that (x)
7GC will only be required to utilize up to 90% of its then available Distributable Free Cash
to make such Redemption Cash Payments and (y) no Redemption Cash Payment will be made if
it would result in a breach, violation or default by 7GC under any debt instrument then in
place (a “Debt Restriction”); |
| o | following
the consummation of the Transactions, in the event a former Hyros stockholder does not receive
its Redemption Cash Payments with respect to all of its 7GC shares as a result of proviso
(x) or (y) above (any such non-redeemed 7GC shares referred to as “Exception Shares”),
(i) each Exception Share will be included in subsequent redemption transactions by 7GC until
the applicable Redemption Cash Payment is made or the former Hyros stockholder transfers
such Exception Share to a non-affiliated third party; (ii) 7GC will use reasonable best efforts
to remove any Debt Restriction on the Redemption Cash Payments for the Exception Shares;
and (iii) 7GC will, on a monthly basis, make such Redemption Cash Payments using up to 90%
of its then available Distributable Free Cash (to the extent greater than $0 and so long
as no Debt Restriction exists); |
| o | following
the consummation of the Transactions, for so long as any Exception Shares remain outstanding,
7GC will not (a) redeem any outstanding shares of common stock of 7GC from any third parties,
(b) conduct any repurchases of 7GC’s then outstanding shares of common stock or (c)
declare or pay any dividends of Distributable Free Cash on any of the outstanding stock of
7GC, except (i) with the prior written consent of the Stockholder Representative, (ii) where
such restricted payments are made pari passu with Redemption Cash Payments or (iii) other
than in connection with the redemption of the Exception Shares; and |
| o | “Distributable
Free Cash” means, at the time of a Redemption Cash Payment (following the consummation
of the Transactions), an amount equal to (a) net cash flow available to 7GC from operating
activities of 7GC, plus (b) net cash flow available to 7GC from then outstanding equity
and debt financing activities, less (c) an allocation for capital expenditures of
7GC and its subsidiaries in an aggregate amount commensurate with commercially reasonable
practices of companies of comparable businesses, sizes and resources as 7GC and its subsidiaries,
less (d) an allocation for working capital of 7GC and its subsidiaries in an aggregate
amount commensurate with commercially reasonable practices of companies of comparable businesses,
sizes and resources as 7GC and its subsidiaries, and less (e) the then aggregate amount
of restricted cash of 7GC and its subsidiaries. |
The
maximum aggregate cash amount that would be payable by 7GC, following the consummation of the Transactions, in connection with all
such Redemption Cash Payments is estimated to be approximately $86.9 million, subject to adjustment for any
adjustments made at closing of the Hyros Acquisition to cash, working capital, and other components of aggregate consideration
under, and in each case calculated in accordance with the terms of, the Hyros Purchase Agreement.
*******
No
Offer or Solicitation
This
Current Report on Form 8-K (this “Current Report”) does not constitute an offer to sell, or a solicitation of an offer
to buy, or a recommendation to purchase, any securities in any jurisdiction, or the solicitation of any vote, consent or approval in
any jurisdiction in connection with the Business Combination or any related transactions, nor shall there be any sale, issuance or transfer
of any securities in any jurisdiction where, or to any person to whom, such offer, solicitation or sale may be unlawful under the laws
of such jurisdiction. This Current Report does not constitute either advice or a recommendation regarding any securities. No offering
of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended (the “Securities
Act”) or an exemption therefrom.
Forward
Looking Statements
Certain
statements included in this Current Report are not historical facts but are forward-looking statements, including for purposes of the
safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally
are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “should,” “would,” “plan,”
“project,” “forecast,” “predict,” “potential,” “seem,” “seek,”
“future,” “outlook,” “target,” and similar expressions that predict or indicate future events or
trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements include, but are not limited to, expectations related to the terms, satisfaction of conditions precedent
and timing of the Business Combination. These statements are based on various assumptions, whether or not identified in this Current
Report, and on the current expectations of 7GC’s and the Company’s management and are not predictions of actual performance.
These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied
on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances
are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control
of the Company. These forward-looking statements are subject to a number of risks and uncertainties, including: changes in domestic and
foreign business, market, financial, political and legal conditions; the inability of the parties to successfully or timely consummate
the Business Combination, including the risk that any required stockholder or regulatory approvals are not obtained, are delayed or are
subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the Business Combination
is not obtained; failure to realize the anticipated benefits of the Business Combination; risks relating to the uncertainty of the projected
financial information with respect to the Company (including as combined with Hyros); the Company’s ability to successfully and
timely develop, sell and expand its technology and products, and otherwise implement its growth strategy; risks relating to the Company’s
operations and business, including information technology and cybersecurity risks, loss of key customers and deterioration in relationships
between the Company and its employees; risks related to increased competition; risks relating to potential disruption of current plans,
operations and infrastructure of the Company as a result of the announcement and consummation of the Business Combination; risks that
the Company is unable to secure or protect its intellectual property; risks that the post-combination company experiences difficulties
managing its growth and expanding operations; the ability to compete with existing or new companies that could cause downward pressure
on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market
share; the amount of redemption requests made by 7GC’s stockholders; the impact of the COVID-19 pandemic; the ability to successfully
select, execute or integrate future acquisitions into the business, including the Hyros Acquisition, which could result in material adverse
effects to operations and financial conditions; and those factors discussed in the sections entitled “Risk Factors” and “Special
Note Regarding Forward-Looking Statements” in 7GC’s Form 10-K for the year ended December 31, 2022, and in those documents
that 7GC has filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results
could differ materially from the results implied by these forward-looking statements. The risks and uncertainties above are not exhaustive,
and there may be additional risks that neither 7GC nor the Company presently know or that 7GC and the Company currently believe are immaterial
that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward looking statements
reflect 7GC’s and the Company’s expectations, plans or forecasts of future events and views as of the date of this Current
Report. 7GC and the Company anticipate that subsequent events and developments will cause 7GC’s and the Company’s assessments
to change. However, while 7GC and the Company may elect to update these forward-looking statements at some point in the future, 7GC and
the Company specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing
7GC’s and the Company’s assessments as of any date subsequent to the date of this Current Report. Accordingly, undue reliance
should not be placed upon the forward-looking statements.
Important
Information for Investors and Stockholders
The
Business Combination will be submitted to stockholders of 7GC for their consideration and approval at a special meeting of stockholders.
7GC and the Company will prepare a registration statement on Form S-4 (the “Registration Statement”) to be filed with
the SEC by 7GC, which will include preliminary and definitive proxy statements to be distributed to 7GC’s stockholders in connection
with 7GC’s solicitation for proxies for the vote by 7GC’s stockholders in connection with the Business Combination and other
matters as described in the Registration Statement, as well as the prospectus relating to the offer of the securities to be issued to
7GC’s stockholders and certain of the Company’s equityholders in connection with the completion of the Business Combination.
After the Registration Statement has been filed and declared effective, 7GC will mail a definitive proxy statement and other relevant
documents to its stockholders as of the record date established for voting on the Business Combination. 7GC’s stockholders and
other interested persons are advised to read, once available, the preliminary proxy statement/prospectus and any amendments thereto and,
once available, the definitive proxy statement/prospectus, in connection with 7GC’s solicitation of proxies for its special meeting
of stockholders to be held to approve, among other things, the Business Combination, because these documents will contain important information
about 7GC, the Company and the Business Combination. Stockholders may also obtain a copy of the preliminary or definitive proxy statement,
once available, as well as other documents filed with the SEC regarding the Business Combination and other documents filed with the SEC
by 7GC, without charge, at the SEC’s website located at www.sec.gov. Copies of these filings may be obtained free of charge
on 7GC’s “SEC Filings” website at https://www.7gc.holdings/sec-filings or by directing a request to info@7gc.co.
Participants
in the Solicitation
7GC
and the Company and their respective directors and executive officers, under SEC rules, may be deemed to be participants in the solicitation
of proxies of 7GC’s stockholders in connection with the Business Combination. Investors and security holders may obtain more detailed
information regarding 7GC’s directors and executive officers in 7GC’s filings with the SEC, including 7GC’s Annual
Report on Form 10-K filed with the SEC on March 31, 2023. Information regarding the persons who may, under SEC rules, be deemed participants
in the solicitation of proxies to 7GC’s stockholders in connection with the Business Combination, including a description of their
direct and indirect interests, which may, in some cases, be different than those of 7GC’s stockholders generally, will be set forth
in the Registration Statement. Stockholders, potential investors and other interested persons should read the Registration Statement
carefully when it becomes available before making any voting or investment decisions.
This
Current Report is not a substitute for the Registration Statement or for any other document that 7GC may file with the SEC in connection
with the potential Business Combination. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DOCUMENTS FILED WITH THE SEC CAREFULLY
AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may
obtain free copies of other documents filed with the SEC by 7GC through the website maintained by the SEC at http://www.sec.gov.
*******
