Banzai International Enters Private Placement — $1.5M Initial Convertible Note

What Happened

• Banzai International, Inc. (PARA) announced a Securities Purchase Agreement dated September 4, 2026 (filed 8-K on Sept 11, 2026) for a private placement with Evergreen Capital Management LLC as purchaser and Aegis Capital Corp. as placement agent. The company issued a convertible promissory note and a common stock purchase warrant. The Initial Closing funded $1,500,000 (gross) in cash; the note’s aggregate principal can increase to $3,571,428 if two additional tranches are funded.

Key Details

• Note terms: initial principal $2,142,857 with a 30% original issue discount (net effective principal lower), 10% annual interest, maturity June 4, 2027; default interest 18% and automatic 20% principal increase on certain defaults.
• Conversion: holder may convert the Note into Common Stock at $2.75 per share (adjusted for standard corporate actions); conversion subject to a 4.99% beneficial ownership limit (can be increased to 9.99% with notice) and an exchange cap of 19.99% of outstanding shares prior to the agreement unless shareholder approval is obtained.
• Warrants: initial Common Warrant to buy up to 779,221 shares at $2.75 per share (additional warrants of up to 519,480 shares available with later tranches); exercisable immediately, five‑year term, cashless exercise if resale registration not in place, same ownership limits as the Note. Anti‑dilution protection triggers for the warrant exercise price if the company fails to repay the Note within 90 days of the Initial Closing.
• Corporate actions & approvals: company must call a special (or include at next annual) stockholder meeting within 60 days to seek approval for issuing more than 20% of outstanding shares at a deemed discount to Nasdaq’s minimum price and for voluntary adjustment of the warrant exercise price. Placement agent fee was 10% of gross proceeds; insiders and large holders agreed to a 90‑day lock‑up.

Why It Matters

• The company received $1.5M in cash now with potential for up to roughly $3.57M total funding, which supports near‑term liquidity but introduces convertible debt that can dilute shareholders if converted or if warrants are exercised. The Note’s conversion price ($2.75) and the warrants could increase share count materially, especially if stockholder approval to exceed the 20% threshold is obtained.
• The financing includes protections and restrictions (prepayment provisions, limits on dividends and share repurchases, accelerated default remedies) that affect corporate flexibility and could accelerate repayment or increase outstanding principal on default. Investors should watch for the special stockholder vote, any additional tranche closings, and potential dilution from conversion or warrant exercise.