Form 8-K - Current report

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): July 18, 2024

GROM SOCIAL ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Florida

001-40409

46-5542401

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

2060 NW Boca Raton Blvd., Suite #6

Boca Raton, Florida 33431

(Address of principal executive offices)

Registrant’s telephone number, including area code: (561) 287-5776

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company 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 Symbols	Name of each exchange on which registered
Common Stock, par value $0.001	GROM	The Nasdaq Capital Market
Warrants to purchase shares of Common Stock, par value $0.001 per share	GROMW	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 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 1.01

Entry Into Material Definitive Agreement.

As previously reported, on November 9, 2023, Grom Social Enterprises, Inc., a Florida corporation (the “Company”), entered into a Securities Purchase Agreement, as amended on November 20, 2023 and March 11, 2024 (the “November 2023 SPA”) with Generating Alpha Ltd., a Saint Kitts and Nevis Corporation (the “Generating Alpha”), pursuant to which the Company has agreed to sell two convertible promissory notes of the Company (the “November 2023 Notes”), with each November 2023 Note having an initial principal amount of $4,000,000, for a price of $3,640,000 per November 2023 Note. In connection with the purchase and sale of the November 2023 Notes, the Company has agreed to issue to Generating Alpha warrants to acquire a total of 3,028,146 shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”).

Also as previously reported, on April 1, 2024, the Company entered into a Securities Purchase Agreement, as amended on April 24, 2024 (the “April 2024 SPA,” and together with the November 2023 SPA, the “Purchase Agreements”) with Generating Alpha, pursuant to which the Company has agreed to sell a convertible promissory note of the Company (the “April 2024 Note”), having an initial principal amount of $650,000, for a price of $520,000. In connection with the purchase and sale of the April 2024 Note, the Company has agreed to issue to Generating Alpha a common stock purchase warrant to acquire a total of 962,962 shares of the Common Stock.

On July 18, 2024, the Company entered into a consent and waiver (the “Waiver”) to November 2023 SPA and April 2024 SPA with Generating Alpha, pursuant to which Generating Alpha consented to a proposed financing that the Company intends to pursue (the “Financing”) and waived any and all restrictions or prohibitions in the Purchase Agreements and all other transaction documents relating to the Financing. As consideration for the Waiver, the Company agreed to the following: (i) 35% of net proceeds received from the Financing will be utilized to repay the principal balances outstanding on the December 2023 Note and April 2024 Note, and the repayments are subject to the 130% optional redemption right under Section 4.1 of the December 2023 Note and the April 2024 Note; (ii) the Company shall use its best efforts to obtain approval of The Nasdaq Stock Market LLC (“Nasdaq”) to reset the conversion floor price of the November 2023 Notes to 20% of Nasdaq Official Closing Price as of the date of the Waiver, (iii) a one-time issuance of a pre-funded warrant (the “Pre-Funded Warrant”) to purchase $750,000 worth of shares of Common Stock at an exercise price of $0.0001 to Generating Alpha, in a form substantially similar to the warrants issued pursuant to the April 2024 SPA, and (iv) waive the requirement to reinvest a percentage of any realized net profit as defined under Section 6.09 of the November 2023 SPA.

Item 3.02

Unregistered Sales of Equity Securities.

The information contained in Item 1.01 above is incorporated herein by reference.

The Pre-Funded Warrant described in Item 1.01 above will be offered and sold in reliance upon an exemption from registration pursuant to Section 4(1) and Regulation D of the Securities Act of 1933, as amended.

The foregoing description of the Waiver does not purport to be complete and is qualified in its entirety by reference to the full text of such documents. The Waiver attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
10.1		Consent and Waiver, dated July 18, 2024, by and between Grom Social Enterprises, Inc. and Generating Alpha Ltd.
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.

	GROM SOCIAL ENTERPRISES, INC.


Date: July 22, 2024	By:	/s/ Darren Marks
		Darren Marks Chief Executive Officer

Exhibit 10.1

July 18, 2024

Sent via Email

Generating Alpha Ltd.

Attention: Dave Martin

Re: Grom Social Enterprises, Inc., a Florida corporation (“we” or the “Company”) Financing Waiver

Dear Dave,

Reference is made to (i) that certain Securities Purchase Agreement by and between the Company and Generating Alpha Ltd., a Saint Kitts and Nevis corporation (“Generating Alpha”) dated as of November 9, 2023 and amended on November 20, 2023 and March 11, 2024 (such Securities Purchase Agreement, together with all amendments, modifications, substitutions, or replacements thereof, collectively referred to as the “2023 SPA”) and (ii) that certain Securities Purchase Agreement by and between the Company and Generating Alpha dated as of April 1, 2024, as amended on April 24, 2024 (the “2024 SPA,” together with the 2023 SPA and all amendments, modifications, substitutions, or replacements thereof, collectively referred to as, the “Purchase Agreements”)

As you are aware, the Company intends to pursue a financing pursuant to the terms set forth in the attached Term Sheet (the “Financing”).

Pursuant to this letter agreement (this “Letter Agreement”), in respect of the Financing, the Company is requesting Generating Alpha’s consent to the Financing and the waiver of any and all restrictions or prohibitions in the Purchase Agreements and all other transaction documents relating to the Financing (the “Consent and Waiver”), which consent and waiver shall not be effective unless and until the Financing is consummated (for the avoidance of doubt such consent and waivers shall be one time consent and waivers only in respect of the Financing and shall not be applicable to any subsequent transaction unless separately agreed between the Company and Generating Alpha in a writing subsequent to this Letter Agreement signed by the parties hereto). As consideration for the Consent and Waiver, the Company agrees to (i) use 35% of the net proceeds received from the Financing to pay off the notes issued pursuant to the Purchase Agreements, which will be subject to a 130% redemption premium (for example purposes, if the Company is paying off $100,000 of debt, they will pay Generating Alpha $130,000 for that $100,000 debt amount). The investors for the Financing shall be deposit all funds with EF Hutton. Upon receipt of the funds, EF Hutton shall apply 35% of all funds received and send a wire to the designated bank account provided to them via email by Generating Alpha Ltd.. , (ii) the Company shall use their best efforts to obtain Nasdaq’s approval to reset the conversion floor price of the notes issued to Generating Alpha in the 2023 SPA, to 20% of Nasdaq Official Closing Price as of the date of this Letter Agreement, pursuant to an amendment in the form annexed hereto, (iii) the Company shall issue Generating Alpha warrants to purchase $750,000 worth of the Company’s common stock, with cashless exercise, an exercise price of $0.0001 per share, in a form substantially similar to the warrants issued pursuant to the 2024 SPA, and (iv) waive the requirement to reinvest a percentage of any realized net profit as defined under Section 6.09 of the 2023 SPA.

By signing below, you hereby represent on behalf of Generating Alpha that you agree to the above items.

This Letter Agreement contains the entire understanding between and among the parties and supersedes any prior understandings and agreements among them respecting the subject matter of this Letter Agreement. This Letter Agreement shall be governed by and construed in accordance with the provisions of the Purchase Agreements. In case any provision of this Letter Agreement shall be held to be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Letter Agreement, and the validity legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

The parties hereby consent and agree that if this Letter Agreement shall at any time be deemed by the parties for any reason insufficient, in whole or in part, to carry out the true intent and spirit hereof or thereof, the parties will execute or cause to be executed such other and further assurances and documents as in the reasonable opinion of the parties may be reasonably required in order more effectively to accomplish the purposes of this Letter Agreement. By signing below, the parties hereto represent and agree that, prior to executing this Letter Agreement, they have had the opportunity to consult with independent counsel concerning the terms of this Letter Agreement.

This Letter Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, for example, www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

Please indicate confirmation of the terms provided herein by executing and returning this Letter Agreement in the space provided below.

[SIGNATURE PAGE FOLLOWS]

Very truly yours,

Grom Social Enterprises, Inc.

By: /s/ Jason Williams_____________

Name: Jason Williams

Title: Chief Financial Officer

Acknowledged and Agreed:

Generating Alpha Ltd.

By: /s/ Maria Cano_______________

Name: Maria Cano

Title: Director

[Signature Page to Waiver]

Cover	Jul. 18, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 18, 2024
Entity File Number	001-40409
Entity Registrant Name	GROM SOCIAL ENTERPRISES, INC.
Entity Central Index Key	0001662574
Entity Tax Identification Number	46-5542401
Entity Incorporation, State or Country Code	FL
Entity Address, Address Line One	2060 NW Boca Raton Blvd., Suite #6
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	(561)
Local Phone Number	287-5776
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Title of 12(b) Security	Common Stock, par value $0.001
Trading Symbol	GROM
Security Exchange Name	NASDAQ
Warrant [Member]
Title of 12(b) Security	Warrants
Trading Symbol	GROMW
Security Exchange Name	NASDAQ