Current Report Filing (8-k)
January 16 2019 - 7:31AM
Edgar (US Regulatory)
U.S. 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):
January 15, 2019
GROM
SOCIAL ENTERPRISES, INC.
(Exact name of small business issuer as
specified in its charter)
Florida
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000-55585
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46-5542401
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer ID No.)
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2060 NW Boca Raton Blvd., #6
Boca Raton, FL 33431
(Address of principal executive offices)
(561) 287-5776
(Issuer’s Telephone Number)
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange 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 a Material Definitive
Agreement
Effective January 15, 2019, Grom Social
Enterprises, Inc. (the “Company”) entered into a Second Amending Agreement (the “Amendment”) to that certain
Share Sale Agreement dated as of June 20, 2016, as subsequently amended (the “Share Sale Agreement”), pursuant to which
we acquired 100% of the common stock of TD Holdings Limited (“TDH”) including, Top Draw Animation, from certain individuals
(the “TDH Sellers”). Pursuant to the Amendment, the parties agreed to further extend the maturity date of the Note,
issued as part of the consideration under the Share Sale Agreement, to April 2, 2020.
The Amendment provides for an amendment
to the Note to provide the TDH Sellers with the right to convert the Note at a conversion price of $0.27 per share, upon the terms
and conditions set forth in the Amendment.
In addition, the parties agreed that in
the event the Note is not repaid prior to July 2, 2019: (i) no management fee shall paid to the Company as provided in the Share
Sale Agreement; (ii) no directors’ fees or any reimbursement in directors’ costs shall be paid to any director of TDH
or its subsidiaries (collectively the “Group”), except for fees and expense claims of Wayne Dearing, an executive officer
of the Company, CEO of TDH, as well as one of the TDH Sellers; (iii) no distribution of cash, payment of fees shall be made by
the Group to the Company or any of its affiliates (iii) the Group shall not assume or pay off any liability of the Company or any
of its affiliates; (iv) the consideration paid under the Share Sale Agreement will be increased by the Group Profit Share, as defined
in the Amendment.
Additionally, under the terms of the
Amendment, the Earn out payments contemplated under the Share Sale Agreement was amended to provide for payment, if earned,
in 50% shares of common stock of the Company and 50% cash in lieu of 75% shares and 25% as originally contemplated by the
Share Sale Agreement. As consideration for entering into the Amendment, the Company agreed to issue an aggregate of 800,000
shares of common stock to the TDH Sellers. The shares will be issued pursuant to an exemption from registration afforded by
Section 4(a)(2) of the Securities Act of 1933, as amended.
The Company released a press release with
respect to the foregoing, a copy of which is attached hereto as Exhibit 99.1.
Attached hereto as Exhibit 99.2 is a proforma
balance sheet as of September 30, 2018 giving effect to the extension of the maturity date of the Note to April 2, 2020 as well
as other equity transactions consummated since September 30, 2018.
The foregoing description of the Amendment
does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which
is attached hereto as Exhibit 10.1 and is incorporated into this report by reference.
Item 3.02 Unregistered Sales of Equity
Securities.
The information above in Item 1.01 regarding
the issuance of shares of to the TDH Sellers is incorporated herein by reference in response to this Item 3.02.
Item 9.01 Financial Statements and
Exhibits
(d) Exhibits. The following exhibit is
included in this Report:
SIGNATURES
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.
Dated: January
16, 2019
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GROM SOCIAL ENTERPRISES, INC.
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(Registrant)
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By:
/s/ Darren Marks
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Darren Marks, Chief Executive Officer
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