Item 8.01 Other Events.
As previously disclosed in the Current Report on Form 8-K filed by
Also as previously disclosed in the Current Report on Form 8-K filed by 7GC with
the
In connection with the Hyros Acquisition, on
? 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
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"); 1
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
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
******* 2 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
3
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
Participants in the Solicitation
7GC and the Company and their respective directors and executive officers, under
This Current Report is not a substitute for the Registration Statement or for
any other document that 7GC may file with the
******* 4
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