GROM SOCIAL ENTERPRISES, INC. : conclusion of a major definitive agreement, disclosure of FD regulations, financial statements and supporting documents (form 8-K)


Item 1.01 Conclusion of a Material Definitive Agreement.

From April 1, 2021, Grom Social Enterprises, Inc., a Florida company (the “Company”), has entered into a binding letter of intent (the “Curiosity LAW”) with
Curiosity Ink Media, LLC, a California limited liability company (“Curiosity”), Russell hicks (“Hicks”), Brent Watts (“Watts”), and all other equity holders of the Curiosity members (collectively, the “Sellers”), by virtue of which the Company has agreed to acquire a total of 80% of the interests of the Curiosity members ( the “Members’ interests of 80%”) of the Sellers, on a pro rata basis.

In accordance with the Curiosity Letter of Intent, the total purchase price of the 80% stakes will be $ 3,678,000, of which: (a) a total of $ 400,000 is payable at closing in cash, to be used to repay a portion of the loans made to Curiosity by Hicks and Watts; (b) a total of $ 3,000,000 is payable at closing in restricted common shares of the Company’s ordinary shares, valued at a price per share equal to the 20-day volume weighted average price (VWAP) of the Company’s ordinary shares; and (c) a total of $ 278,000 is payable by the closing issuance to Hicks and Watts of 8% convertible promissory notes payable in equal monthly installments on an 18-month amortized basis. Sellers will have the option of receiving up to a supplement $ 2,000,000 in consideration for the acquisition, paid 100% in ordinary shares of the Company, based on the successful execution of certain specified contracts and / or material agreements. Sellers will also have the option of receiving a supplement $ 17,500,000 in consideration for the purchase, paid 50% in cash and 50% in common shares of the Company, depending on the achievement of certain performance milestones by December 31, 2025.

The Company has the exclusive right to acquire the 80% of the interests of the members through June 30, 2021. Completion of the acquisition is subject to the conclusion by the parties of a definitive agreement and other closing conditions.

The foregoing descriptions of the Curiosity Letter of Intent do not purport to be complete and are qualified in their entirety by reference to the full text of this document, a copy of which is attached to this current report on Form 8-K (“Report”). as Exhibits 10.1 and incorporated herein by reference.

Article 7.01 Regulation FD Disclosure.

At April 7, 2021, the Company issued a press release noting its entry into the Curiosity Letter of Intent and related matters. The text of the press release is provided as Exhibit 99.1 of this Report and incorporated herein by reference.

The information in this section 7.01 of this report, including the attached Exhibit 99.1, is provided and will not be considered “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor will it be deemed to be incorporated by reference in any documents filed by the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference to this report in this filing.

Cautionary Statements

This filing includes “forward-looking statements”. All statements other than statements of historical fact included or incorporated herein may constitute forward-looking statements. Actual results may vary significantly from those expressed or implied in these statements and are subject to a number of risks and uncertainties. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee that these expectations will prove to be correct. Forward-looking statements involve risks and uncertainties that affect the Company’s operations, financial performance and other factors as discussed in documents filed by the Company with the
Security and Trade Commission (“SECOND”). Among the factors likely to cause significant differences in results are the risks mentioned in the periodic reports that the Company files with the SECOND. You are urged to carefully review and consider the warnings and other information contained in these documents, especially those appearing under the heading “Risk Factors”. The Company does not undertake any obligation to update any forward-looking statement, except as required by law.

Item 9.01 Financial statements and supporting documents.

(d) Exhibitions. The following exhibit is included in this report:

Part # Description

   10.1         Letter of Intent, dated as of April 1, 2021, by and between the
              Company, Curiosity and the Sellers
   99.1         Press Release, dated April 7, 2021


In accordance with the requirements of the Securities Exchange Act of 1934, the Holder has duly caused this report to be signed on his behalf by the undersigned, duly authorized.

                    GROM SOCIAL ENTERPRISES, INC.

Dated: April 7, 2021 By: / s / Melvin leiner

                         Melvin Leiner
                         Executive Vice President and
                         Chief Financial Officer


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