Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

On April 12, 2021, the staff of the Securities and Exchange Commission (the "SEC Staff") issued a statement entitled "Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies ("SPACs")" (the "SEC Staff Statement") in which the SEC Staff highlighted the potential accounting implication of certain terms that are common in warrants issued in connection with the initial public offerings of SPACs such as 7GC & Co. Holdings Inc. (the "Company").

Specifically, the SEC Staff Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement (the "Warrant Agreement"), dated as of December 22, 2020, between the Company and Continental Stock Transfer & Trust Company, as warrant agent.

As a result of the SEC Staff Statement, the Company reevaluated the accounting treatment of (i) the 11,500,000 redeemable warrants (the "Public Warrants") that were included in the units issued by the Company in its initial public offering (the "IPO") and (ii) the 7,350,000 privately issued warrants (together with the Public Warrants, the "Warrants") issued to the Company's sponsor in a private placement that closed concurrently with the closing of the IPO, and determined that the Warrants should be classified as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. While the Company has not generated any operating revenues to date and will not generate any operating revenues until after completion of its initial business combination, at the earliest, the change in fair value of the Warrants is a non-cash charge and will be reflected in the Company's statement of operations.

On May 26, 2021, after consultation with the Company's management and accounting advisors, the Audit Committee of the Company's Board of Directors (the "Audit Committee") concluded that, in light of the SEC Staff Statement, it is appropriate to restate the Company's previously issued audited financial statements as of December 31, 2020 (balance sheets), and for the period from September 18, 2020 (inception) through December 31, 2020 (statements of operations, statements of changes in stockholders' equity (deficit), statements of cash flows) (which were included in the Company's Annual Report on Form 10-K for the period ended December 31, 2020) (the "Non-Reliance Period," and the financial statements, the "Non-Reliance Financial Statements").

Considering such restatement, the Audit Committee concluded that the Non-Reliance Financial Statements should no longer be relied upon. The Company will file an amendment to its Annual Report on Form 10-K for the period ended December 31, 2020 reflecting the reclassification of the Warrants for the Non-Reliance Period contemporaneously with this Current Report on Form 8-K.

Going forward, unless the Company amends the terms of the Warrant Agreement, the Company expects to continue to classify the Warrants as liabilities, which would require the Company to incur the cost of measuring the fair value of the Warrant liabilities, which may have an adverse effect on the Company's results of operations.

The Company's management and the Audit Committee have discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with WithumSmith+Brown, PC, the Company's independent registered public accounting firm.





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