NASDAQ false 0001826011 0001826011 2024-05-15 2024-05-15 0001826011 us-gaap:CommonClassAMember 2024-05-15 2024-05-15 0001826011 us-gaap:WarrantMember 2024-05-15 2024-05-15

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 15, 2024

 

 

Banzai International, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-39826   85-3118980

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

435 Ericksen Ave, Suite 250

Bainbridge Island, Washington

  98110
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (206) 414-1777

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Class A common stock, par value $0.0001 per share   BNZI   The Nasdaq Global Market
Redeemable Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50   BNZIW   The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 


Item 2.02

Results of Operations and Financial Condition.

On May 15, 2024, Banzai International, Inc. (the “Company”) issued a press release announcing financial results for the quarter ended March 31, 2024 (the “Press Release”). A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated into this Item 2.02 by reference.

The Press Release includes the Company’s Adjusted EBITDA loss for the three months ended March 31, 2024 and the three months ended March 31, 2023. In addition to the Company’s results determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the Company believes that Adjusted EBITDA, a non-GAAP measure as defined below, is useful in evaluating its operational performance distinct and apart from certain irregular, non-cash, and non-operational expenses. The Company uses this information for ongoing evaluation of operations and for internal planning purposes. The Company believes that non-GAAP financial information, when taken collectively with results under GAAP, may be helpful to investors in assessing its operating performance and comparing its performance with competitors and other comparable companies.

Non-GAAP measures should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company endeavors to compensate for the limitation of Adjusted EBITDA by also providing the most directly comparable GAAP measure, which is net loss, and a description of the reconciling items and adjustments to derive the non-GAAP measure. Some of these limitations are:

 

   

Adjusted EBITDA does not consider the potentially dilutive impact of stock-based compensation.

 

   

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or contractual commitments.

 

   

Adjusted EBITDA does not reflect impairment and restructuring costs.

 

   

Adjusted EBITDA does not reflect interest expense or other income.

 

   

Adjusted EBITDA does not reflect income taxes.

 

   

Adjusted EBITDA does not reflect audit, legal, incremental accounting and other expenses tied to M&A or the Business Combination.

Other companies, including companies in the Company’s own industry, may calculate Adjusted EBITDA differently from the way it does, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should only be considered alongside results prepared in accordance with GAAP, including various cash-flow metrics, net income (loss) and our other GAAP results and financial performance measures.


Net Income/(Loss) to Adjusted EBITDA Reconciliation

 

($ in Thousands)

   Three Months
Ended
March 31,
2024
     Three Months
Ended
March 31,
2023
     Period-
over-
Period $
    Period-
over-
Period %
 

Net loss

   $ (4,501    $ (3,763    $ (738     19.6

Other income, net

     (4      (63      59       -93.7

Depreciation expense

     2        2        —        0.0

Stock based compensation

     253        402        (149     -37.1

Interest expense

     451        538        (87     -16.2

Interest expense - related party

     578        383        195       50.9

Income tax (benefit) expense

     (1      3        (4     -133.3

GEM commitment fee expense

     200        —         200       nm  

Gain on extinguishment of debt

     (528      —         (528     nm  

Loss on debt issuance

     171        —         171       nm  

Change in fair value of warrant liability

     (408      —         (408     nm  

Change in fair value of warrant liability - related party

     (115      —         (115     nm  

Change in fair value of simple agreement for future equity

     —         23        (23     -100.0

Change in fair value of simple agreement for future equity - related party

     —         303        (303     -100.0

Change in fair value of bifurcated embedded derivative liabilities

     —         32        (32     -100.0

Change in fair value of bifurcated embedded derivative liabilities - related party

     —         137        (137     -100.0

Change in fair value of convertible promissory notes

     544        —         544       nm  

Transaction related expenses*

     1,842        1,251        591       47.2
  

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA (Loss)

   $ (1,508    $ (626    $ (882     141.1
  

 

 

    

 

 

    

 

 

   

 

 

 

 

*

Transaction related expenses include

 

($ in Thousands)

   Three Months Ended
March 31,
2024
     Three Months Ended
March 31,
2023
     Period-over-
Period $
    Period-over-
Period %
 

Professional fees - audit

   $ 344      $ 277      $ 67       24.2

Professional fees - legal

     597        68        529       777.9

Incremental accounting

     680        808        (128     -15.8

Market study, M&A support

     221        98        123       125.5
  

 

 

    

 

 

    

 

 

   

 

 

 

Transaction related expenses

   $ 1,842      $ 1,251      $ 591       47.2
  

 

 

    

 

 

    

 

 

   

 

 

 

 

Item 8.01

Other Events.

On May 3, 2024, the Company and YA II PN, Ltd. (“Yorkville”) entered into a Debt Repayment Agreement (the “Debt Repayment Agreement”) with respect to the unsecured promissory note in the principal amount of $2,000,000 issued to Yorkville on December 14, 2023 (the “December Promissory Note”) and the unsecured promissory note in the principal amount of $1,500,000 issued to Yorkville on March 26, 2024 (the “March Promissory Note,” together with the December Promissory Note, the “Promissory Notes”). The Company issued the Promissory Notes pursuant to a Standby Equity Purchase Agreement, dated as of December 14, 2023, by and among Yorkville and the Company, as amended from time to time (the “SEPA”). As of the date hereof, there is an aggregate $2,700,000 outstanding under the Promissory Notes.


Under the Debt Repayment Agreement, Yorkville has agreed that, upon completion of a Company registered offering (the “Offering”) and repayment of an aggregate $2,000,000 outstanding under the Promissory Notes (the “Repayment Amount”), Yorkville will not deliver to the Company any Investor Notice (as defined in the SEPA) and will not exercise its right to convert the remainder of the amount outstanding under the Promissory Notes for a period commencing on the date of the closing of the Offering and ending on the date that is 90 days thereafter. Under the Debt Repayment Agreement, the Company and Yorkville also agreed to extend the maturity date of the Promissory Notes to the date that is 120 days after the closing of the Offering and to satisfy the $200,000 payment premium due in connection with an early redemption through the issuance of an Advance Notice (as defined in the SEPA) for shares of the Company’s Class A common stock, par value $0.0001 per share. The Debt Repayment Agreement is conditioned on the completion of the Offering by June 2, 2024.

The foregoing description of the Debt Repayment Agreement is qualified in its entirety by the full text of such document which is filed as Exhibit 99.2 to this Current Report and incorporated by reference into this Item 8.01.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit
No.

  

Description

99.1    Press Release dated May 15, 2024.
99.2    Debt Repayment Agreement, dated as of May 3, 2024, by and among the Company and Yorkville.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 15, 2024

 

BANZAI INTERNATIONAL, INC.
By:  

/s/ Joseph Davy

  Joseph Davy
  Chief Executive Officer

Exhibit 99.1

 

LOGO

Banzai Reports First Quarter 2024 Financial Results

SEATTLE, WA – May 15, 2024 – Banzai International, Inc. (NASDAQ: BNZI) (“Banzai” or the “Company”), a leading SaaS marketing technology company, today reported financial results for the first quarter ended March 31, 2024.

First Quarter 2024 Financial Summary and Recent Operational Highlights

 

   

Annual Recurring Revenue (“ARR”) for March 2024 was $4.9 million, a 14.2% increase compared to Q4 2023, and a 5% increase year-over-year.

 

   

Revenue of $1.1 million exceeded the operating forecast as of the previous quarter by 4%.

 

   

Net Income increased sequentially by $1.9 million, a 30% increase from Q4 2023.

 

   

The Company added over 230 customers in April, bringing the total number of customer wins and reactivations during the first four months of 2024 to 810.

 

   

Banzai unveiled Reach 2.0, a major milestone release of the Company’s flagship marketing product. Companies using Reach 2.0 include Cisco (NASDAQ: CSCO), a Fortune 500 communications and security technology company; The Economist Impact, which offers partnership solutions combining think-tank rigor, media brand creativity and global influence to catalyze growth and change in the world; and CrowdStrike (NASDAQ: CRWD), a fast-growing cloud security software company.

Banzai has agreed with Yorkville that upon repayment of $2 million outstanding under the Yorkville Promissory Notes, Yorkville will not deliver any Investor Notice under the SEPA and will not exercise its right to convert the remainder of the $0.7 million or less outstanding under the Yorkville Promissory Notes for a period of 90 days following such repayment. Repayment of the Yorkville Promissory Notes will be conditioned upon completion of a Banzai registered offering.

“Q1 was a strong rebuilding quarter for Banzai compared to Q4 2023. Our positive quarterly growth was driven by improvements to both our Demio product and our customer acquisition efficiency. We are excited about the transformative potential of our new Reach 2.0 product and the new customers we’ve added so far in 2024,” said Joe Davy, CEO of Banzai. “We have many new, exciting product releases coming in 2024 as Banzai continues to leverage AI and data to deliver solutions that give marketers superpowers.”

First Quarter 2024 Financial Results

Banzai believes its non-GAAP financial measure ARR is more meaningful in evaluating its performance. The Company’s management team evaluates its financial and operating results utilizing this non-GAAP measure.

For the three months ended March 31, 2024, Banzai reported total revenue of approximately $1,079 thousand, representing a decrease of approximately $98 thousand, or approximately 8.3%, compared to the three months for the same period ended March 31, 2023. This decrease is primarily attributable to lower Reach revenue which declined by approximately $74 thousand due to a shift in Banzai’s focus to its Demio product and decision, which decision was reversed in 2024, to begin phasing out the Reach product. In 2024 Banzai is revitalizing its focus on the Reach product through re-engineering and expanded sales efforts. Demio revenue was lower by approximately $25 thousand for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 due to churn and lower new sales period-over-period.


For the three months ended March 31, 2024 and 2023, Banzai’s cost of revenue totaled approximately $381 thousand and approximately $412 thousand, respectively. This represents a decrease of approximately $31 thousand, or approximately 7.5%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, is due primarily to lower customer base and an approximately 4% lower average cost per customer, driven by lower infrastructure costs of approximately $45 thousand, contracted services of approximately $34 thousand, subscription payroll of approximately $14 thousand, and merchant fee costs of approximately $3 thousand. The lower contracted services and data licenses cost described above were offset by the increase of the streaming services costs of approximately $65 thousand.

For the three months ended March 31, 2024 and 2023, Banzai’s gross profit was approximately $698 thousand and approximately $765 thousand, respectively. This represents a decrease of approximately $67 thousand, or approximately 8.8% due to the decreases in revenue of approximately $98 thousand and decreases in cost of revenue of approximately $31 thousand described above.

For the three months ended March 31, 2024 and 2023, Banzai reported net losses of approximately $4.5 million and approximately $3.8 million, respectively. The greater net loss is primarily due to a reduction in total other expenses of approximately $0.5 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, offset by an increase in operating expenses of approximately $1.1 million and a decrease in gross profit of approximately $0.1 million.

For the three months ended March 31, 2024, Banzai’s Adjusted EBITDA Loss was approximately $1,508 thousand, reflecting a decrease in the earnings of approximately $882 thousand compared to a loss of approximately $626 thousand for the three months ended March 31, 2023. This period-over-period decrease in earnings is primarily attributable to an increase in interest expense—related party and transaction related expenses.

Liquidity

As of March 31, 2024, Banzai had cash of approximately $1.0 million.

End-of-Year 2024 Target

Banzai targets December 2024 ARR to be $8.1—$10 million, based on the Company’s March 2024 ARR, organic growth during the year as demonstrated by year-to-date 2024 customer wins and reactivations, and currently signed non-binding LOIs to acquire Cliently and Boast. The targeted December 2024 ARR does not include any additional intended acquisitions.

The midpoint target, or $9.1 million, foresees a 97% increase in ARR, which would be equally attributable to organic growth and the acquisitions currently under LOI. Banzai’s management anticipates tracking the Company’s progress to its targeted December 2024 ARR as part of the Company’s 2024 quarterly earnings reports.

Annual recurring revenue refers to revenue, normalized on an annual basis, that Banzai expects to receive from its customers for providing them with products or services. The December 2024 ARR information provided above is based on Banzai’s current estimates of internal growth, the completion of the Cliently and Boast acquisitions and those companies contributing ARR based on current levels and is not a guarantee of future performance. These statements are forward-looking and actual ARR may differ materially. Refer to the “Forward-Looking Statements” section below for information on the factors that could cause Banzai’s actual ARR to differ materially from these forward-looking statements.


About Banzai

Banzai is a marketing technology company that provides essential marketing and sales solutions for businesses of all sizes. On a mission to help their customers achieve their mission, Banzai enables companies of all sizes to target, engage, and measure both new and existing customers more effectively. Banzai customers include Square, Hewlett Packard Enterprise, Thermo Fisher Scientific, Thinkific, Doodle and Active Campaign, among thousands of others. Learn more at www.banzai.io. For investors, please visit https://ir.banzai.io/.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often use words such as “believe,” “may,” “will,” “estimate,” “target,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “propose,” “plan,” “project,” “forecast,” “predict,” “potential,” “seek,” “future,” “outlook,” and similar variations and expressions. Forward-looking statements are those that do not relate strictly to historical or current facts. Examples of forward-looking statements may include, among others, statements regarding the Company’s: future financial, business and operating performance and goals; annualized recurring revenue and customer retention; ongoing, future or ability to maintain or improve its financial position, cash flows, and liquidity and its expected financial needs; potential financing and ability to obtain financing; acquisition strategy, including the Company’s expectations regarding market conditions and available opportunities, the Company’s ability to execute on such strategy and the expected benefits of such strategy; proposed acquisitions and, if completed, their potential success and financial contributions; strategy and strategic goals, including being able to capitalize on opportunities; the Company’s expectation regarding amendment of the Yorkville Promissory Notes, which is conditioned on repayment of a portion of such notes in connection with a registered offering; expectations relating to the Company’s industry, outlook and market trends; total addressable market and serviceable addressable market and related projections; plans, strategies and expectations for retaining existing or acquiring new customers, increasing revenue and executing growth initiatives; and product areas of focus and additional products that may be sold in the future.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements. Therefore, investors should not rely on any of these forward-looking statements. Factors that may cause actual results to differ materially include the Company’s ability to repay a portion of the Yorkville Promissory Notes, changes in the markets in which the Company operates, customer demand, the financial markets, economic, business and regulatory and other factors, such as the Company’s ability to execute on its strategy, its assumptions regarding available and serviceable markets, its ability to realize some or all of the expected benefits of its acquisition strategy and its ability to effectively integrate the businesses or technologies it acquires, if any. More detailed information about risk factors can be found in the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q under the heading “Risk Factors,” and in other reports filed by the Company, including reports on Form 8-K. The Company does not undertake any duty to update forward-looking statements after the date they are made.

This release does not constitute an offer to sell or the solicitation of an offer to buy any securities.


Contacts:

Investors

Ralf Esper

Gateway Group

949-574-3860

bnzi@gateway-grp.com

Media

Tori Klimczak

BLASTmedia

317-806-1900 ext

banzai@blastmedia.com


Banzai International, Inc.

Condensed Consolidated Balance Sheets

 

     March 31, 2024     December 31, 2023  
     (Unaudited)        

ASSETS

    

Current assets:

    

Cash

   $ 1,026,932     $ 2,093,718  

Accounts receivable, net of allowance for credit losses of $3,557 and $5,748, respectively

     34,670       105,049  

Prepaid expenses and other current assets

     1,073,914       741,155  
  

 

 

   

 

 

 

Total current assets

     2,135,516       2,939,922  

Property and equipment, net

     3,080       4,644  

Goodwill

     2,171,526       2,171,526  

Operating lease right-of-use assets

     90,308       134,013  

Other assets

     38,381       38,381  
  

 

 

   

 

 

 

Total assets

     4,438,811       5,288,486  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

    

Current liabilities:

    

Accounts payable

     8,336,909       6,439,863  

Accrued expenses and other current liabilities

     3,862,714       5,194,240  

Convertible notes (Yorkville)

     3,064,000       1,766,000  

Convertible notes - related party

     —        2,540,091  

Convertible notes

     3,709,889       2,693,841  

Notes payable

     6,948,710       6,659,787  

Notes payable - related party

     3,082,650       2,505,137  

Deferred underwriting fees

     4,000,000       4,000,000  

Deferred fee

     —        500,000  

Warrant liability

     233,000       641,000  

Warrant liability - related party

     460,000       575,000  

Earnout liability

     37,125       59,399  

Due to related party

     67,118       67,118  

GEM commitment fee liability

     —        2,000,000  

Deferred revenue

     1,245,306       1,214,096  

Operating lease liabilities, current

     158,965       234,043  

Total current liabilities

     35,206,386       37,089,615  

Other long-term liabilities

     75,000       75,000  
  

 

 

   

 

 

 

Total liabilities

     35,281,386       37,164,615  
  

 

 

   

 

 

 

Stockholders’ deficit:

    

Common stock, $0.0001 par value, 275,000,000 shares authorized and 20,221,589 and 16,019,256 issued and outstanding at March 31, 2024 and December 31, 2023, respectively (Note 15)

     2,022       1,602  

Preferred stock, $0.0001 par value, 75,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2024 and December 31, 2023

     —        —   

Additional paid-in capital

     20,421,999       14,888,593  

Accumulated deficit

     (51,266,596     (46,766,324
  

 

 

   

 

 

 

Total stockholders’ deficit

     (30,842,575     (31,876,129
  

 

 

   

 

 

 

Total liabilities and stockholders’ deficit

   $ 4,438,811     $ 5,288,486  
  

 

 

   

 

 

 


Banzai International, Inc.

Unaudited Condensed Consolidated Statements of Operations

 

     For the Three Months Ended
March 31,
 
     2024     2023  

Operating income:

    

Revenue

   $ 1,079,472     $ 1,177,061  

Cost of revenue

     381,380       412,226  
  

 

 

   

 

 

 

Gross profit

     698,092       764,835  
  

 

 

   

 

 

 

Operating expenses:

    

General and administrative expenses

     4,308,929       3,170,063  

Depreciation expense

     1,564       2,404  
  

 

 

   

 

 

 

Total operating expenses

     4,310,493       3,172,467  
  

 

 

   

 

 

 

Operating loss

     (3,612,401     (2,407,632
  

 

 

   

 

 

 

Other expenses (income):

    

GEM settlement fee expense

     200,000       —   

Other income, net

     (4,118     (62,538

Interest income

     (10     (111

Interest expense

     451,399       537,878  

Interest expense - related party

     577,513       383,284  

Gain on extinguishment of liability

     (527,980     —   

Loss on debt issuance

     171,000       —   

Change in fair value of warrant liability

     (408,000     —   

Change in fair value of warrant liability - related party

     (115,000     —   

Change in fair value of simple agreement for future equity

     —        22,861  

Change in fair value of simple agreement for future equity - related party

     —        303,139  

Change in fair value of bifurcated embedded derivative liabilities

     —        32,415  

Change in fair value of bifurcated embedded derivative liabilities - related party

     —        137,285  

Change in fair value of convertible notes

     544,000       —   
  

 

 

   

 

 

 

Total other expenses, net

     888,804       1,354,213  
  

 

 

   

 

 

 

Loss before income taxes

     (4,501,205     (3,761,845
  

 

 

   

 

 

 

Income tax (benefit) expense

     (933     3,277  
  

 

 

   

 

 

 

Net loss

   $ (4,500,272   $ (3,765,122
  

 

 

   

 

 

 

Net loss per share

    

Basic and diluted

   $ (0.26   $ (0.59
  

 

 

   

 

 

 

Weighted average common shares outstanding

    

Basic and diluted

     17,355,609       6,382,180  
  

 

 

   

 

 

 

 

Exhibit 99.2

DEBT REPAYMENT AGREEMENT

This Debt Repayment Agreement (this “Agreement”) is entered into as of May 3, 2024, effective upon the closing of the Offering (as defined below), by and between BANZAI INTERNATIONAL, INC. (f/k/a 7GC & Co. Holdings Inc.), a Delaware corporation (the “Company”), and YA II PN, LTD., a Cayman Islands exempt limited partnership managed by Yorkville Advisors Global, LP (“Yorkville”), in respect of (i) that certain Convertible Promissory Note, dated December 14, 2023, made by the Company in favor of Yorkville in the original principal amount of $2,000,000 (the “December Promissory Note”); (ii) that certain Convertible Promissory Note, dated February 5, 2024, made by the Company in favor of Yorkville in the original principal amount of $1,000,000 (the “February Promissory Note”); and (iii) that certain Convertible Promissory Note, dated March 26, 2024, made by the Company in favor of Yorkville in the original principal amount of $1,500,000 (the “March Promissory Note,” together with the December Promissory, the “Outstanding Promissory Notes”). Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Promissory Notes.

RECITALS

A. As of the date hereof, the February Promissory Note has been fully repaid, with no obligations remaining thereunder, and there remains outstanding under the Outstanding Promissory Notes in the aggregate $2,800,000 of Principal and no Interest.

B. Pursuant to Section (1)(d) of each of the Outstanding Promissory Notes, the Company has the option to redeem early a portion or all amounts outstanding under the Outstanding Promissory Notes, subject to certain conditions (the “Redemption Right”).

C. The Company intends to issue and sell (a) shares of its Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), (b) warrants to purchase one share of Class A Common Stock (the “Warrants”), and (c) pre-funded Warrants to purchase shares of Class A Common Stock, in a registered offering pursuant to the Company’s registration statement on Form S-1 (File No. 333-278871), as may be amended from time to time (the “Offering”).

D. The Company intends to use $2,000,000 of the proceeds of the Offering (the “Repayment Proceeds”) to redeem a portion of the outstanding Principal and Interest under the Promissory Notes (the “Repayment”).

E. The Company and Yorkville each desire that, in connection with the Repayment and subject to the receipt by Yorkville of the Repayment Proceeds, Yorkville shall not (i) deliver to the Company any Investor Notice (as defined in that certain Standby Equity Purchase Agreement, dated as of December 14, 2023, made by and between Yorkville and the Company (the “SEPA”)) pursuant to the SEPA, or (ii) exercise its right to convert all or any portion of any Principal and Interest outstanding under the Outstanding Promissory Notes pursuant to Section (3)(a) of the Promissory Notes (the “Conversion Right”) for the duration of the Standstill Period (as defined below).


AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of the Company and Yorkville hereby acknowledges and agrees to the following:

1. Repayment of Debt. Upon closing of the Offering, and payment of the Repayment Proceeds by the Company to Yorkville, the Repayment Proceeds shall be applied to, and shall extinguish in full, $2,000,000 of the outstanding balance of Principal and Interest on the Promissory Notes.

2. Acknowledgement and Waiver of Conditions. Yorkville hereby unconditionally and irrevocably waives any conditions to the Company’s ability to exercise its Redemption Right, other than the requirement to pay the Payment Premium, which Prepayment Premium shall be satisfied through delivery of an Advance Notice (the “Advance Notice”) from the Company to Yorkville for such number of Class A Common Stock that the Company reasonably believes would be sufficient to result in net proceeds of approximately $200,000, and the net proceeds of the Advance Notice up to $200,000 shall be paid to Yorkville as the Payment Premium (with any surplus being paid to the Company). If the net proceeds of the Advance Notice are less than $200,000, the Company shall pay the balance to Yorkville in cash.

3. Standstill. Within three Business Days of the closing of the Offering, the Company shall (i) pay to Yorkville the Repayment Proceeds, and (ii) deliver to Yorkville the Advance Notice (collectively, the “Company Deliverables”). Yorkville agrees that for the period commencing on the date of the closing of the Offering and ending on the date that is ninety (90) days after the closing of the Offering (the “Standstill Period”): (A) it will not (i) deliver to the Company any Investor Notice pursuant to the SEPA or (ii) exercise its Conversion Right and (B) any obligation of the Company to make any monthly payments pursuant to Section 1(c) of the Promissory Notes shall be suspended , provided that the Standstill Period shall terminate if the Company Deliverables are not made in the timeframe set forth above.

4. Amendment to Floor Price. Upon commencement of the Standstill Period, the Floor Price, as described in each of the Outstanding Promissory Notes, shall be adjusted to a price to be mutually agreed between the Company and Yorkville.

5. Extension of Maturity Date. Upon commencement of the Standstill Period, the Maturity Date of each of the Promissory Notes shall be extended to the date that one hundred and twenty (120) days after the closing of the Offering.

6. Termination. If the closing of the Offering does not occur within thirty (30) days of the date hereof, this Agreement shall terminate and be null and void.

7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, and is deemed by the parties to have been made, executed and delivered in, the State of Delaware.

8. Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Executed signature pages of this Agreement may be delivered to the parties by electronic transmission, and the parties may rely on any such signature page for all purposes.

[Signature Page Follows]

 

- 2 -


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

COMPANY:

 

BANZAI INTERNATIONAL, INC.

By:

  /s/ Joseph Davy

Name: Joseph Davy

Title: Chief Executive Officer

 

YORKVILLE:

 

YA II PN, LTD.

By: Yorkville Advisors Global, LP

Its: Investment Manager

By: Yorkville Advisors Global II, LLC

Its: General Partner

      By:   /s/ Matt Beckman
  Name: Matt Beckman
  Title: Member

 

[Signature Page to Debt Repayment Agreement]

v3.24.1.1.u2
Document and Entity Information
May 15, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date May 15, 2024
Entity Registrant Name Banzai International, Inc.
Entity Incorporation State Country Code DE
Entity File Number 001-39826
Entity Tax Identification Number 85-3118980
Entity Address Address Line 1 435 Ericksen Ave
Entity Address Address Line 2 Suite 250
Entity Address City Or Town Bainbridge Island
Entity Address State Or Province WA
Entity Address Postal Zip Code 98110
City Area Code 206
Local Phone Number 414-1777
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Entity Emerging Growth Company true
Entity Ex Transition Period false
Amendment Flag false
Entity Central Index Key 0001826011
Class A Common Stock [Member]  
Document Information [Line Items]  
Security 12b Title Class A common stock, par value $0.0001 per share
Trading Symbol BNZI
Security Exchange Name NASDAQ
Warrant [Member]  
Document Information [Line Items]  
Security 12b Title Redeemable Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50
Trading Symbol BNZIW
Security Exchange Name NASDAQ

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