UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Consent Solicitation Statement Pursuant to Section 14(a) of
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Definitive Proxy
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Soliciting Material Pursuant to §240.14a-12 |
GROM SOCIAL ENTERPRISES,
INC.
(Name of Registrant as Specified In Its Charter)
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Registrant)
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2060 NW Boca Raton Blvd., #6 Boca
Raton, FL 33431
NOTICE OF CONSENT SOLICITATION
November 5, 2021
Dear Shareholder of Grom Social Enterprises, Inc.:
Notice is hereby given to all our stockholders of all classes as
October 7, 2021 (the “Record Date”) that we are seeking the written
consents of stockholders (the “Consents”) for the approval of a
financing transaction that would result in the issuance of
promissory notes and warrants convertible into or exercisable
for common stock, that in the aggregate equals or exceeds 20%
of the outstanding float prior to the offering.
Nasdaq Rule 5635 (d) (the “Nasdaq Rule”) requires that a company
obtain approval from its shareholders prior to issuance of shares
of common stock or any securities convertible into or
exercisable for common stock, that in the aggregate equals or
exceeds 20% of the outstanding float prior to the offering. We are
requesting your consent therefore, for the following proposal (the
“Proposal”).
To approve the issuance of (i) $6,000,000 principal amount 10%
Original Issue Discount Senior Secured Convertible Note,
convertible into Common Stock at $4.20 per share, due 18 months
from issuance (the “Second Tranche Note”), (ii) a five-year common
stock purchase warrant to purchase 1,041,194 shares of common stock
at $4.20 per share (the “Second Tranche Warrant”), and (iii) shares
of common stock upon conversion or redemption of the Second
Tranche Note, and upon exercise of the Second Tranche Warrant in
accordance with their respective terms, as the second tranche of a
private placement offering totaling up to $10,400,000.
The details of this transaction are outlined in this Consent
Solicitation and other public filings we have made.
We intend to close on the $6,000,000 second tranche as soon as
possible after receipt of properly executed Consents from the
holders of a majority of our stock of all classes, voting together
as a single class, and satisfaction of all other conditions to
closing, as more fully described herein.
Consent of a holders of a majority of our common stock, and Series
C Preferred Stock which vote on an as converted basis with the
Common Stock, are entitled to vote in this matter (the “Majority
Stockholders”). Certain members of management that hold proxies for
almost all the Series C Stock as well as certain other common stock
including their own, comprise greater than a majority of the voting
power, and have already agreed to approve the Proposal.
Our Board of Directors (“Board”) has fixed October 7, 2021, as the
Record Date for holders of the Company’s Common Stock and Series C
Stock entitled to participate in this Consent Solicitation and to
provide Consents. This Notice of Consent Solicitation is being
issued by the Company and is intended to be mailed on or about
November 5, 2021, to all holders of our Common Stock and Series C
Preferred Stock as of the Record Date. The Consent Solicitation
Statement on the following pages describes the matters presented to
stockholders herein. The entire Consent Solicitation Statement is
available for review by each stockholder
on https://gromsocial.com/proxymaterials.
The Board requests that you sign, date and return your Consent
included as Annex A to the Consent Solicitation
Statement in the enclosed envelope (or via the Internet) as soon as
possible, but no later than November 26, 2021.
By Order of the Board of Directors,
Darren Marks
Chairman and Chief Executive Officer
November 5, 2021

2060 NW Boca Raton Blvd., #6 Boca
Raton, FL 33431
CONSENT SOLICITATION STATEMENT
November 5, 2021
This Consent Solicitation Statement is being furnished to all
stockholders of the common stock, par value $0.001 per share (the
“Common Stock”), and Series C 8% Convertible Preferred Stock, par
value $0.001 per share (the “Series C Stock”) of Grom Social
Enterprises, Inc., a Florida corporation (“Grom,” the
“Company,” “we,” “our” or “us”), as of October 7, 2021, the record
date (the “Record Date”) fixed by our Board of Directors (“Board”)
in connection with the solicitation of written consents
(“Consents”) from the stockholders of the Company. We are
soliciting the Consents in lieu of a special meeting of the
stockholders to approve the following proposal (“Proposal”):
To approve the issuance of (i) $6,000,000 principal amount 10%
Original Issue Discount Senior Secured Convertible Note,
convertible into Common Stock at $4.20 per share, due 18 months
from issuance (the “Second Tranche Note”), (ii) a five-year common
stock purchase warrant to purchase 1,041,194 shares of common stock
at $4.20 per share (the “Second Tranche Warrant”), and (iii) shares
of common stock upon conversion or redemption of the Second Tranche
Note, and upon exercise of the Second Tranche Warrant in accordance
with their respective terms, as the second tranche of a private
placement offering totaling up to $10,400,000.
On September 14, 2021, the Company entered into a Securities
Purchase Agreement (as amended and in effect on the date hereof,
the “Purchase Agreement”) with L1 Capital Global Opportunities
Master Fund (the “Investor”) pursuant to which it sold (i) a
$4,400,000 principal amount 10% Original Issue Discount Senior
Secured Convertible Note, due March 13, 2023 (the “First Tranche
Note”) and, (ii) a five year warrant to purchase 813,278 shares of
common stock at an exercise price of $4.20 per share (the
“Warrant”) in exchange for consideration of $3,960,000 (the “First
Tranche”). No shareholder approval is required in connection with,
and we are not seeking your consent for approval of, the First
Tranche note and warrant issuances.
The terms of this offering however, as amended on October 20, 2021,
contemplated a second tranche (the “Second Tranche”) to the
offering in the amount of $6,000,000 of convertible notes
substantially identical to the initial notes (the “Second Tranche
Notes”) and warrants to purchase 1,041,194 shares of common stock
at $4.20 per share exercisable for five years (the “Second Tranche
Warrants”).
There are other conditions to the closing on the additional
$6,000,000 Second Tranche, other than obtaining the approval of a
majority of shareholders in this Consent. Specifically, the closing
of the Second Tranche is conditioned upon, among other conditions,
a registration statement being declared effective by the SEC
covering the shares issuable upon conversion or redemption of the
First Tranche Note and the exercise of the First Tranche Warrants,
and, a limitation on the principal amount of notes that may be
issued to such principal amount that is no more than 30% of the
Company’s market capitalization as reported by Bloomberg L.P.,
which requirement may be waived by the Investor. If the foregoing
30% amount is exceeded, the parties may issue such lesser amount in
the Second Tranche that does not exceed such threshold.
The Second Tranche Note, if approved and all conditions are
satisfied, will be convertible into common stock at a rate of $4.20
per share (the “Conversion Price”) into 1,428,571 shares if
converted by the Investor and, is repayable in 16 equal monthly
installments by payment of cash. Alternatively, the monthly payment
installments on the note may be satisfied, at the discretion of the
Company and if the Equity Conditions (as hereinafter defined) are
met as provided in the note, by the issuance of shares at a price
of 95% of the VWAP prior to the respective monthly redemption dates
(with a floor of $1.92) multiplied by 102% of the amount due on
such date, or, approximately 3,187,500 shares if redeemed in full
at the lowest price. In the event that the ten-day VWAP drops below
$1.92 the Company will have the right to pay in stock at said VWAP
with any shortfall paid in cash. The Conversion Price may be
adjusted in the event of dilutive issuances but in no event to less
than $0.54.
The Company’s right to make monthly payments in stock in lieu of
cash is conditioned on certain conditions (the “Equity
Conditions”). The Equity Conditions required to be met in order to
redeem the notes with stock in lieu of a monthly cash payment,
among other conditions set forth therein, include without
limitation, that a registration statement be in effect with respect
to the resale of the shares issuable upon conversion or redemption
of the First Tranche Note and Second Tranche Note respectively (or,
that an exemption under Rule 144 is available), and that the
average daily trading volume of the Company’s common stock would
have to be at least $550,000 immediately prior to the date of the
monthly redemption.
The Nasdaq 20% Rule
Nasdaq Rule 5635 (d) (the “Nasdaq Rule”) requires that a Company
listed on Nasdaq is required to obtain approval from its
shareholders prior to issuance of shares of Common Stock or any
securities convertible into or exercisable for Common Stock, that
equals or exceeds 20% of the outstanding float prior to the
offering. We are requesting shareholder consents hereby because the
issuance of shares upon conversion of the Second Tranche Note and
upon exercise of the Second Tranche Warrants, when combined with
previously issued notes and warrants in the First Tranche of the
Offering, would exceed twenty percent (20%) or more of the issued
and outstanding number of shares of our Common Stock outstanding
prior to the Offering.
As of September 19, 2021, the Board unanimously approved, subject
to receipt of written Consents from our Majority Shareholders, the
Proposal.
Under Section 607.0704 of the Florida Business Corporations Act
(“FBCA”), and in accordance with Article 2, Section 12 our Bylaws,
any action required or permitted by the FBCA to be taken at an
annual or special meeting of our stockholders may be taken without
a meeting, without prior notice and without a vote, if Consents in
writing, setting forth the action so taken, are signed by the
holders of outstanding stock having at least the voting power that
would be necessary to authorize or take such action at a meeting.
Pursuant to our Articles of Incorporation, as amended, the holders
of our Series C Stock have the right to vote on an as-converted
basis voting together as a single class with the holders of the
Company’s Common Stock, with each share entitling the holder to
1.5625 votes per share. We are sending this Consent Solicitation
Statement to all record and beneficial owners of our Common Stock
and Series C Stock as of the Record Date. As of the Record Date,
there were (i) 12,422,106 shares of Common Stock outstanding, with
each share of Common Stock entitled to one vote, and (ii) 9,400,309
shares of Series C Stock outstanding, with each share of Series C
Stock voting as 1.5625 shares of Common Stock, or the equivalent of
14,687,982 Common Stock votes in the aggregate). Only stockholders
of record of our Common Stock and Series C Stock as of the Record
Date will be entitled to submit written Consents for the
Proposal.
Consents signed by at least the majority shareholders of the Common
Stock and Series C Stock when counting both classes together on
an as converted basis (the “Majority Shareholders”), are
required to approve the Proposal set forth herein (“Shareholder
Approval”). To be counted towards the Consents required for
approval of the transactions described herein, your Consent must be
received by November 26, 2021; provided, however, that if
sufficient votes in favor of the Proposal prior to such time, we
reserve the right to accept such Proposal as approved.
In order to register your Consent to the matters set forth herein,
you should return your signed and dated written Consent in the
enclosed envelope. You may also register your Consent by telephone
or the Internet by following the instructions on Annex
A.
We intend to close on the Second Tranche of the offering and to
issue the Additional Securities immediately upon receipt of
properly executed Consents from the Majority Shareholders,
presuming satisfaction of all other conditions. A copy of the form
of written Consent to be executed by stockholders is annexed to
this Consent Solicitation Statement as Annex A.
You may revoke your written Consent at any time prior to the time
that we have received a sufficient number of Consents to approve
the Proposal set forth herein. A revocation may be in any written
form validly signed and dated by you, as long as it clearly states
that the Consent previously given is no longer effective. The
revocation should be sent to us at Grom Social Enterprises, Inc.,
c/o Equinity Shareowner Services, 1110 Centre Pointe Curve, Suite
101, Mendota Heights MN 55120; Attention: Mr. Chad Dalton.
There are no rights of appraisal or similar rights of dissenters
with respect to the Proposal.
Darren Marks and Melvin Leiner, both executive officers and
directors of the Company, hold proxies from all of the holders of
Series C Stock As well as some shares of Common Stock, granting
each of Messrs. Marks and Leiner the power to vote almost all of
the shares held by the Series C Preferred Stock until May 20, 2023.
These persons have already approved and recommended the Proposal in
their capacities as directors and have agreed to vote all of their
own shares as well as shares of common stock and Series C Stock
that they hold a proxy for, in favor of the Proposal.
The Company will pay the costs of soliciting these Consents. In
addition to soliciting Consents by mail, our officers, directors
and other regular employees, without additional compensation, may
solicit Consents personally, by facsimile, by e-mail, or by other
appropriate means. Banks, brokers, fiduciaries and other custodians
and nominees who forward written Consents soliciting materials to
their principals will be reimbursed for their customary and
reasonable out-of-pocket expenses.
Our executive offices are located at 2060 NW Boca Raton Blvd., #6,
Boca Raton, FL 33431 and our telephone number there is (561)
287-5776.
FREQUENTLY ASKED QUESTIONS
The following questions and answers are intended to respond to
frequently asked questions by the holders of our voting equity
(i.e. our Common Stock and Series C Stock) concerning the actions
approved by our Board and our stockholders entitled to provide
Consents. These questions do not, and are not intended to, address
all the questions that may be important to you. You should
carefully read the entire Consent Solicitation Statement, as well
as its exhibits, annexes and the documents incorporated by
reference in this Consent Solicitation Statement.
Q: WHO IS ENTITLED TO CONSENT TO THE PROPOSAL DESCRIBED IN THIS
CONSENT SOLICITATION STATEMENT?
A: All holders of our Common Stock and Series C Stock as of the
Record Date. As of October 7, 2021, the Record Date, there were (a)
12,422,106 shares of our Common Stock issued and outstanding, and
(b) 9,400,309 shares of Series C Stock issued and outstanding. The
holders of Series C Stock vote on an as-converted basis, with
1.5625 votes for each share of Series C Stock, resulting in voting
power equivalent to14,687,982 shares of Common Stock, or 54.2%. Our
executives that hold the proxies for the Series C Stock have
already agreed to consent and have also agreed to consent with
respect to their owns shares of Common Stock.
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER
OF RECORD AND AS A BENEFICIAL OWNER?
A: If you hold stock that is registered directly in your name
(whether in physical paper form or electronically) with our
transfer agent, EQ Shareholder Services, you are considered, with
respect to those shares, a “stockholder of record.”
If however, your shares are held in a stock brokerage account or by
a bank or other nominee (also known as being held in “street name”)
then such entity is the actual “record holder” and you are
considered the beneficial owner of those shares in your
account. If you hold shares in a brokerage, this Consent
Solicitation Statement is first being sent to your broker, bank or
nominee as the stockholder of record, and they will forward you
this Consent Solicitation with instructions on how to vote your
shares. As the beneficial owner, you have the right to direct your
broker, bank or nominee to then provide your Consent or to withhold
Consent to the Proposal set forth herein.
Your broker, bank or nominee has enclosed an instruction card for
you to use in directing the broker, bank or nominee regarding
whether to consent or to withhold consents to the Proposal set
forth herein. Your broker, bank, or other nominee will only be able
to vote your shares with respect to the Proposal set forth herein
if you have instructed them to provide your Consent. Please return
your completed written Consent form that you received from your
broker, bank or other nominee and contact the person responsible
for your account so that your vote can be counted. If your broker,
bank, or other nominee permits you to provide instructions via the
Internet or by telephone, you may vote that way as well.
Q: WILL THERE BE A MEETING OF STOCKHOLDERS TO CONSIDER THE PROPOSAL
SET FORTH IN THIS CONSENT SOLICITATION STATEMENT?
A: No. We will not hold a meeting of stockholders. In accordance
with Section 607.0704 of the FBCA and Article 2, Section 12 our
Bylaws, our stockholders are permitted to take action without a
meeting if the votes represented by Consents in writing, that would
be necessary to authorize or approve the proposed actions set forth
in this Consent Solicitation Statement, represent at least a
majority of our outstanding voting power. Once we have a sufficient
number of votes, the Proposal will be deemed approved.
Q: WHAT IS THE RECOMMENDATION OF OUR BOARD AS TO THE PROPOSAL
DESCRIBED IN THIS CONSENT SOLICITATION STATEMENT?
A: Our Board unanimously recommends that our stockholders provide
their CONSENTS IN FAVOR of the Proposal set forth in this
Consent Solicitation Statement.
Q: WHAT IS THE REQUIRED VOTE TO APPROVE THE PROPOSAL?
A. The Proposal must
receive signed written Consents from holders of record on the
Record Date of at least a majority our voting equity consisting of
our issued and outstanding Common Stock and Series C Stock, voting
on an as-converted basis with the Common Stock as a single class.
Our Series C Stock proxy holders have already agreed to consent to
the Proposal.
Q: WHAT DO I NEED TO DO NOW TO REGISTER MY CONSENTS?
A: You may Consent to the Proposal set forth herein by registering
your Consent by mail, facsimile or via electronic mail on the
Internet by following the instructions on Annex A that are
provided to you by your broker or the transfer agent.
Q: WHAT IF I DO NOT RETURN THE WRITTEN CONSENTS?
A: Your failure to respond will have the same effect as voting
“Against” the Proposal set forth in this Consent Solicitation.
Q: CAN I VOTE AGAINST THE PROPOSAL?
A: We are not holding a special meeting of our stockholders, so
there will be no “yea” or “nay” vote. However, because the Proposal
is being voted for by written consent, simply not delivering an
executed written Consent in favor of our Proposal will have the
same practical effect as a Consents Withheld (AGAINST) the Proposal
at a special meeting of stockholders.
Q: CAN I REVOKE MY CONSENTS AFTER I HAVE DELIVERED IT?
A: If you are the stockholder of record, you may revoke your
written Consent at any time prior to the time that we receive a
sufficient number of written Consents to approve the Proposal set
forth herein. A revocation may be in any written form validly
signed and dated by you, as long as it clearly states that the
Consents previously given is no longer effective. The revocation
should be sent to us at Grom Social Enterprises, Inc., c/o Equinity
Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota
Heights MN 55120; Attention: Mr. Chad Dalton.
If your shares are held in a brokerage account by a broker, bank,
or other nominee, you should follow the instructions provided by
your broker, bank, or other nominee, provided that such revocation
is made prior to the time that we receive a sufficient number of
written Consents to approve the Proposal set forth herein. A
revocation may be in any written form validly signed and dated by
you, as long as it clearly states that the Consent previously given
is no longer effective.
Q: BY WHEN MUST WE RECEIVE A SUFFICIENT NUMBER OF CONSENTS?
A: We are requesting you to send us your written Consents by
November 26, 2021. Our Board may extend the deadline to receive
written Consents in its sole discretion.
Under the FBCA, written Consents will remain in effect until a
sufficient number of Consents are received by us to take the
actions proposed herein; provided, however, that such written
Consents will not remain effective after 60 days from the date of
the earliest dated and delivered Consents.
Q: WHAT IS THE REASON FOR THE PROPOSAL
A We are requesting
shareholder consents to satisfy Nasdaq “20% Rule” also known as
Rule 5635(d). Nasdaq Rule 5635(d) requires listed companies such as
us, to obtain stockholder approval prior to issuance of shares of
Common Stock or any securities, convertible into shares of Common
Stock that could be equal to twenty percent (20%) or more of the
issued and outstanding number of shares of our Common Stock. The
issuance of shares underlying the Second Tranche Note and Second
Tranche Warrants, when combined with previously issued notes and
warrants in the First Tranche of the Offering, would exceed twenty
percent (20%) or more of the issued and outstanding number of
shares of our Common Stock outstanding prior to the Offering.
Accordingly, your consent is required issue these securities.
Q: WHAT HAPPENS IF THE PROPOSAL DOES NOT RECEIVE CONSENTS FROM OUR
MAJORITY STOCKHOLDERS?
A: We will not issue the Additional Securities in the Second
Tranche in the event that we fail to receive properly executed
written Consents from the Majority Shareholders for the Proposal.
However, if this happens, we will be required to find financing
elsewhere depending on our capital needs and, no assurance can be
made that we will be able to do so.
Q: WHO WILL PAY THE COSTS OF SOLICITING CONSENTS?
A: The Company will pay all of the costs of sending and tabulating
votes relating to this Consent Solicitation Statement. We may also
pay brokerage firms and other custodians for their reasonable
expenses for forwarding information materials to the beneficial
owners of our Common Stock. We are not soliciting any proxies and
will not contract for other services in connection with the
shareholder action approving the Proposal.
PROPOSAL
On October 19, 2021, our Board unanimously approved and recommended
to the shareholders that they approve, the closing of the Second
Tranche of the Offering and issuance of the Second Tranche Notes
and Second Tranche Warrants. The Proposal requires written Consents
from holders of record of at least a majority of our voting power
consisting of the issued and outstanding shares of our Common Stock
and Series C Stock on the Record Date entitled to submit such
Consents. The holders of our Series C Stock vote on an as-converted
basis, with 1.5625 votes for each share of Series C Stock, which
will result in voting power by them equivalent to 14,570,795 shares
(or, approximately 53% of our voting power).
The Proxy holders for most of the Series C Stock holders as well as
certain members of management, have already signed voting
agreements to approve the Proposal, making it unlikely that the
proposal will fail.
Background; $10,400,000 Offering of Convertible Notes and
Warrants
On September 14, 2021 the Company entered into the Purchase
Agreement with the Investor pursuant to which it sold (i) a
$4,400,000 principal amount First Tranche Note, convertible at
$4.20 per share and due March 13, 2023 and, (ii) a five year First
Tranche Warrant to purchase 813,278 shares of common stock at an
exercise price of $4.20 per share, in exchange for consideration of
$3,960,000 (the “First Tranche”), with a contemplated Second
Tranche of $1,500,000 of identical notes and warrants. The Second
Tranche was increased by agreement of the parties to $6,000,000 and
1,041,194 warrants on October 20, 2021.
No shareholder approval is required in connection with, and we are
not seeking your consent for approval of, the First Tranche note
and warrant issuances.
The terms of this offering however, as amended on October 20, 2021,
contemplated a Second Tranche to the offering in the amount of
$6,000,000 of convertible notes substantially identical to the
initial notes (the “Second Tranche Notes”) and warrants to purchase
1,041,194 shares of common stock at $4.20 per share exercisable for
five years (the “Second Tranche Warrants”).
Other Conditions to Closing of $6,000,000 Second Tranche
In addition to requiring stockholder consent prior to the closing
of the $6,000,000 Second Tranche, other conditions must be
satisfied as well. Specifically, the closing of the Second Tranche
is conditioned upon, among other conditions, a registration
statement being declared effective by the SEC covering the shares
issuable upon conversion or redemption of the First Tranche Note
and the exercise of the First Tranche Warrants, and, a limitation
on the principal amount of notes that may be issued to such
principal amount that is no more than 30% of the Company’s market
capitalization as reported by Bloomberg L.P., which requirement may
be waived by the Investor.
Shares That May Be Issued Upon Conversion or Repayment of Second
Tranche Note
The Second Tranche Note, if approved and all conditions are
satisfied, will be convertible into common stock at a Conversion
Price of $4.20 per share, into 1,428,571 shares if converted by the
Investor and, is repayable in 16 equal monthly installments by
payment of cash. Alternatively, the monthly payment installments on
the note may be satisfied, at the discretion of the Company and if
the Equity Conditions (as hereinafter defined) are met as provided
in the note, by the issuance of shares at a price of 95% of the
VWAP prior to the respective monthly redemption dates (with a floor
of $1.92) multiplied by 102% of the amount due on such date, or,
approximately 3,187,500 shares if redeemed in full at the lowest
price. In the event that the ten-day VWAP drops below $1.92 the
Company will have the right to pay in stock at said VWAP with any
shortfall paid in cash. The Conversion Price may be adjusted in the
event of dilutive issuances but in no event to less than $0.54.
The Company’s right to make monthly payments in stock in lieu of
cash is conditioned on certain conditions (the “Equity
Conditions”). The Equity Conditions required to be met in order to
redeem the notes with stock in lieu of a monthly cash payment,
among other conditions set forth therein, include without
limitation, that a registration statement be in effect with respect
to the resale of the shares issuable upon conversion or redemption
of the First Tranche Note and Second Tranche Note, as the case may
be, (or, that an exemption under Rule 144 is available), and that
the average daily trading volume of the Company’s common stock
would have to be at least $550,000 immediately prior to the date of
the monthly redemption.
In the event that the conditions to closing the Second Tranche
investment are satisfied the Company intends on issuing (i) a
$6,000,000 principal amount note identical to the First Note but
due 16 months from the closing of the Second Tranche and, (ii) a
warrant exercisable for five years to purchase 1,041,194 at an
exercise price of $4.20 per share for consideration of
$5,400,000.
The conversion and redemption terms as well as all other material
terms of the Second Tranche Note, and exercise price of terms of
the warrants to be issued in the Second Tranche are identical in
all other material respects.
In the event that the Second Tranche Note is converted by the
Investor, it would result in the issuance of at least 1,428,572
shares of common stock plus additional shares for interest. In the
event that it is repaid by redemption each month, up to
approximately 3,125,000 shares if redeemed at the lowest redemption
price of $1.92 per share. The note may be converted and redeemed in
any combinations of the foregoing.
In addition, if the Second Tranche is approved hereby, it will
result in the issuance of an additional 1,041,194 warrants
exercisable at $4.20 per share, with anti-dilution adjustments for
subsequent share issuances below said price, with a floor of
$0.54.
The closing of the additional investment in the Second Tranche
closing is subject to a registration statement being declared
effective by the SEC covering the shares issuable upon conversion
or redemption of the First Tranche Note and Warrants, shareholder
consent being obtained as required by Nasdaq Rule 5635(d), and
limits the principal amount of notes that may be issued to an
aggregate of 30% of the Company’s market capitalization as reported
by Bloomberg L.P., which requirement may be waived by the Investor.
If the foregoing 30% amount is exceeded, the parties may issue such
lesser amount in the Second Tranche that does not exceed such
threshold.
Default Rate
In the event of an event of default, if the stock price is below
the Conversion Price at time of default and only for so long as a
default is continuing, the notes would be convertible at a rate of
80% of the lowest VWAP in the ten prior trading days, provided,
that if the default is cured the default conversion rate elevates
back to the normal Conversion Price.
The Investor currently has the right to accelerate up to 3 of the
16 monthly repayment amounts. This amount will increase to 6 months
in the event that the Second Tranche Note is approved and issued as
more fully detailed in the Note.
Warrant Terms
Pursuant to the Amended Purchase Agreement, in the First Tranche,
Investor acquired a First Tranche Warrant to purchase 813,278
shares at an exercise price of $4.20 per share, and in the Second
Tranche, and if approved hereby and presuming a closing on the
maximum amount of $6,000,000 notes, the Investor will acquire
warrants to purchase 1,041,194 shares. The Warrants are exercisable
for 5 years from the date of their respective issuances. The
Warrants issued in both tranches have the same anti-dilution
protection as the Notes and same adjustment floor. The Warrants are
exercisable via cashless exercise only for so long as no
registration statement covering resale of the shares is in
effect.
Lockup Agreements
The Purchase Agreement, as amended, provides for the continuation
of the existing lockup agreements entered into between various
executive officers, directors through June 21, 2022 and 5%
beneficial owners of common stock through December 16, 2021, and EF
Hutton, as underwriter relating to the June 16, 2021 public
offering and NASDAQ up-listing.
Registration Rights
The Company and L1 executed a Registration Rights Agreement
pursuant to which the Company was required to file a registration
statement with the SEC, registering all Conversion Shares and
Warrant Shares for resale, which is required to go effective no
later than 75 days after September 14, 2021, the date of the
closing of the 1st Tranche of the Offering.
Security Agreement
The Company entered into a Security Agreement L1 pursuant to which
L1 was granted a security interest in all of the assets of the
Company and certain of its subsidiaries. As part of the entry into
the Security Agreement, certain pre-existing secured creditors
agreed to give up their exclusive senior security interest in our
TDH subsidiary assets, in exchange for a shared senior secured
interest with L1 on a pari pasu basis on all assets of the
Company.
The foregoing description of the Purchase Agreement, the Note, the
Warrant, the Subsidiary Guaranty, the Registration Rights
Agreement, the Security Agreement and the Intercreditor Agreement
does not purport to be complete and is subject to and qualified in
its entirety by reference to the full text of such agreements,
copies of which were filed as Exhibits 10.1, 10.2, 10.3, 10.4,
10.5, 10.6 and 10.7 to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on September 20, 2021.
Reasons for Shareholder Approval
Our Common Stock is listed on the Nasdaq Stock Market and,
therefore, we are subject to the Nasdaq Stock Market Listing
Rules.
Pursuant to Nasdaq Rule 5635(d), the Company is required to obtain
approval from its shareholders prior to issuance of shares of
Common Stock or any securities, convertible into shares of Common
Stock that could be equal to twenty percent (20%) or more of the
issued and outstanding number of shares of our Common Stock.
Accordingly, prior to selling the securities in the Offering that
could potentially result in
the issuance of twenty (20%) or more of the issued and outstanding
number of the Company’s Common Stock, the Company needs to obtain
the approval from its shareholders as required by Nasdaq Rule 5635
(d).
The closing of the First Tranche of the offering did not exceed
this limit. However, the issuance of notes and warrants in the
Second Tranche, when combined with the first or on its own, would
exceed the 20% limit. Accordingly, shareholder consent is
required.
We intend to close on the Second Tranche of the Offering and to
issue the Additional Securities immediately upon receipt of
properly executed Consents from the Majority Shareholders.
Use of Proceeds
The Company intends on utilizing the proceeds from the sale of
Second Tranche Notes and Second Tranche Warrants for purposes of
general working capital, and further developing its strategic
relationships and possible joint ventures and acquisitions. The
Company does not have any specific acquisition or joint venture
transactions at this time or at the time of entry into the Purchase
Agreement.
Consequences of the Issuances to L1
The issuance of the Conversion Shares and Warrant Shares will
result in a significant increase in the number of shares of our
Common Stock outstanding and, as a result, our shareholders will
own a smaller percentage of the outstanding Common Stock and,
accordingly, a smaller percentage interest in the voting power,
liquidation value and aggregate book value of the Company.
Our shareholders will incur dilution of their percentage ownership
in the Company as a result of the issuances to L1. Immediately
prior to the closing on the Purchase Agreement, there were
approximately 12,422,106 shares of Common Stock outstanding. An
additional 4,330,662 shares of Common Stock could be issued to L1
upon the conversion or redemption of the Notes and Warrants issued
to L1 on both tranches. In the event that the stock price declines
and the Company elects to repay the Notes with stock, the
redemption price could go as low as $1.92 per share, thereby
increasing the shares issued to them substantially.
As a result of the foregoing issuances (assuming no other issuances
by the Company), L1 will have the right to acquire (subject to
limitations in their Notes and Warrants) 25.9% of our outstanding
shares of Common Stock. As a result, L1 will have a significant
voting power to determine the outcome of any corporate transaction
or other matter submitted to our stockholders for approval,
including, but not limited to, the election of directors and the
approval of corporate transactions.
Finally, the Conversion Price of the Notes and exercise price of
the Warrants will be adjusted downward pursuant to the full ratchet
anti-dilution protections provided therein, in the event of lower
priced share issuances, with a floor of $0.54 per share. This could
lead to additional shares and even further dilution to current
stockholders.
Recommendation of the Board of Directors
Our Board of Directors recommends that you CONSENT (FOR) to the
Proposal.
Two of our directors, Mel Leiner and Darren Marks, hold proxies for
(i) 9,325,309 shares of Series C Preferred Stock which effectively
have 1.5625 votes per share for an aggregate of approximately
14,570,795 votes or approximately 53.5% of the voting control of
the Company, and (ii) 1,638,772 shares of Common Stock, in addition
to shares of their own that they will vote in favor of the
Proposal.
PRINCIPAL STOCKHOLDERS
The following table lists, as of October 20, 2021, the number of
shares of common stock beneficially owned by (i) each person,
entity or group (as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934) known to the Company to be the
beneficial owner of more than 5% of the outstanding common stock;
(ii) each of our directors (iii) each of our Named Executive
Officers and (iv) all executive officers and directors as a group.
Information relating to beneficial ownership of common stock by our
principal stockholders and management is based upon information
furnished by each person using "beneficial ownership" concepts
under the rules of the SEC. Under these rules, a person is deemed
to be a beneficial owner of a security if that person directly or
indirectly has or shares voting power, which includes the power to
vote or direct the voting of the security, or investment power,
which includes the power to dispose or direct the disposition of
the security. The person is also deemed to be a beneficial owner of
any security of which that person has a right to acquire beneficial
ownership within 60 days. Under the SEC rules, more than one person
may be deemed to be a beneficial owner of the same securities, and
a person may be deemed to be a beneficial owner of securities as to
which he or she may not have any pecuniary interest. Except as
noted below, each person has sole voting and investment power with
respect to the shares beneficially owned and each stockholder's
address is c/o Grom Social Enterprises, Inc., 2060 NW Boca Raton
Blvd., #6, Boca Raton, Florida, 33431.
The percentages below are calculated based on 12,552,106 shares of
common stock (which reflects a reverse stock split of our shares of
common stock at a ratio of 1-for-32, which was effective on May 13,
2021) and 9,400,309 shares of Series C Stock issued and outstanding
as of October 15, 2021.
Name of Beneficial Owner |
|
Common
Stock |
|
|
Percentage
of
Common
Stock
|
|
Series C
Preferred
Stock |
|
|
Percentage
of
Series C
Stock
|
|
Combined
Voting
Power |
|
|
Executive Officers and
Directors: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darren Marks |
|
711,611 |
|
(1) |
5.7% |
|
– |
|
|
– |
|
62.1% |
|
(11) |
Melvin Leiner |
|
342,495 |
|
(2) |
2.7% |
|
– |
|
|
– |
|
60.8% |
|
(12) |
Robert Stevens |
|
7,813 |
|
(3) |
* |
|
– |
|
|
– |
|
* |
|
|
Norman Rosenthal |
|
9,117 |
|
(4) |
* |
|
– |
|
|
– |
|
* |
|
|
Thomas J. Rutherford |
|
89,515 |
|
|
* |
|
– |
|
|
– |
|
* |
|
|
All officers and directors as a
group (6 persons) |
|
1,170,217 |
|
(5) |
9.3% |
|
– |
|
|
– |
|
63.8% |
|
(14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5% or Greater
Holders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denis J. Kerasotes
31 Fairview Lane
Springfield, Illinois 62711 |
|
** |
|
|
* |
|
3,816,105 |
|
(6)(13) |
41.4% |
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condor Equities, LLC (7)
2535 Webb Girth Road
Gainesville, Georgia 30507 |
|
** |
|
(8)(13) |
8.6% |
|
3,031,300 |
|
(13) |
32.9% |
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 3 Developments (9)
2415 Alta Monte Drive
Cedar Park, Texas 78613 |
|
** |
|
|
* |
|
520,000 |
|
(13) |
5.6% |
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eileen F. Kerasotes Family Trust
(10)
4747 County Road 501
Bayfield, CO 81122 |
|
* |
|
|
* |
|
472,420 |
|
(13) |
5.1% |
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell Hicks |
|
692,291 |
|
(15) |
5.5% |
|
– |
|
|
– |
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brent Watts |
|
692,291 |
|
(16) |
5.5% |
|
– |
|
|
– |
|
– |
|
|
______________
*Less than 1%
**Less than 5%
(1) Represents 711,611 shares held by Family Tys, LLC (“Family
Tys”), of which Mr. Marks is the managing member and over which Mr.
Marks has voting and dispositive power. Does not include an
aggregate of (i) 9,325,309 shares of Series C Stock (with 1.5625
votes per share, or 14,570,795 votes in the aggregate) and (ii)
1,638,722 shares, for which Mr. Marks and Mr. Leiner have a voting
proxy until May 20, 2023.
(2) Represents 342,495 shares held by 4 Life LLC (“4 Life”), of
which Mr. Leiner is the managing member and over which Mr. Leiner
has voting and dispositive power. Does not include an aggregate of
(i) 9,325,309 shares of Series C Stock (with 1.5625 votes per
share, or 14,570,795 votes in the aggregate), or (ii) 1,638,722
shares of common stock, for which Mr. Leiner and Mr. marks have a
voting proxy until May 20, 2023.
(3) Represents shares held by Thistle Investments, LLC, of which
Mr. Stevens is managing member and over which Mr. Stevens has sole
voting and dispositive power.
(4) Represents shares held by Tempest Systems, Inc., of which Mr.
Rosenthal is chief executive officer and over which Mr. Rosenthal
has sole voting and dispositive power.
(5) Does not include an aggregate of (i) 9,325,309 shares of Series
C Stock (with 1.5625 votes per share, or 14,570,795 votes in the
aggregate), and (ii) 1,638,722 shares of common stock, for which
Messrs. Marks and Leiner have a voting proxy until May 20,
2023.
(6) Includes 782 shares held by the Denis J. Kerasotes Trust, dated
June 13, 2017, of which Mr. Kerasotes as trustee has sole voting
and dispositive power.
(7) Dale Nabb, manager of Condor Equities, LLC (“Condor”), has sole
voting and dispositive power of the shares held by Condor.
(8) Includes (i) an aggregate of 100,000 shares underlying
currently exercisable warrants at an average exercise price of
$7.36 per share, and (ii) 23,438 shares held by Dale Nabb, manager
of Condor.
(9) Michael Tapajna, chief executive officer of Section 3
Developments, Inc. (“Section 3”), has sole voting and dispositive
power of the shares held by Section 3.
(10) John G. Kerasotes, as trustee of the Eileen F. Kerasotes
Trust, has sole voting and dispositive power over the shares held
by such Trust.
(11) Based upon (i) 711,611 shares of common stock held by Family
Tys of which Mr. Marks is the managing member and over which Mr.
Marks has voting and dispositive power and (ii) the voting rights
to an aggregate of (A) 1,638,722 shares of common stock held by
certain holders of our Series C Stock, and (B) 9,325,309
shares of Series C Stock, having the right to 1.5625 votes
for each share of Series C Stock for which Mr. Marks has a voting
proxy until May 20, 2023.
(12) Based upon (i) 342,495 shares held by 4 Life of which Mr.
Leiner is the managing member and over which Mr. Leiner has voting
and dispositive power and (ii) and the voting rights to an
aggregate of (A) 1,638,722 shares of common stock held by certain
holders of our Series C Stock, and (B) 9,325,309
shares of Series C Stock, having the right to 1.5625 votes
for each share of Series C Stock for which Mr. Leiner has a voting
proxy until May 20, 2023.
(13) Darren Marks, the Company’s Chief Executive Officer,
President, and a director and Melvin Leiner, the Company’s
Executive Vice President, Chief Financial Officer, Chief Operating
Officer, Treasurer, Secretary and a director, have the voting
rights to such shares of Series C Stock and common stock until
August 6, 2022, pursuant to voting proxies from such
shareholders.
(14) Includes 9,325,309 shares of Series C Stock (with 1.5625 votes
per share, or 14,570,795 votes in the aggregate).
(15) As of September 26, 2021, Russell Hicks was appointed as
President and Chief Content Officer of Curiosity Ink Media, and as
President of Top Draw Animation. Address for Mr. Hicks is c/o the
Company 2060 NW Boca Raton Blvd., #6 Boca Raton, FL 33431
(16) As of September 26, 2021, Brent Watts was appointed as Chief
Creative Officer of Curiosity Ink Media. Address for Mr. Watts is
c/o the Company 2060 NW Boca Raton Blvd., #6 Boca Raton, FL
33431.
Proxies and Voting Control by Certain Members of
Management
Darren Marks, the Company’s Chief Executive Officer, President, and
a director, and Melvin Leiner, the Company’s Executive Vice
President, Chief Operating Officer, and a director, have all of the
voting rights of the Series C Stock until May 20, 2023, pursuant to
a proxy from the Series C shareholders.
As October 24, 2021, the number of our issued and outstanding
shares of (i) Common Stock is 12,552,106 and (ii) Series C
Preferred Stock is 9,400,309. The shares of Series C Preferred
Stock effectively have 1.5625 votes per share (an aggregate of
approximately 14,687,982 votes or approximately 53.9% of the voting
control of the company).
The holders of our Series C Preferred Stock gave Darren Marks and
Mel Leiner a proxy to vote 9,325,309 issued and outstanding shares
of preferred stock that they have which accounts for an aggregate
of approximately 14,570,795 votes or approximately 53.5% of the
voting control of the company). In addition, the Series C Holders
granted proxies over an additional 1,638,722 shares of Common Stock
they hold.
Finally, Mr. Marks is the managing member of Family Tys, LLC which
holds an additional 711,611 shares of common stock and over which
Mr. Marks has voting and dispositive power.
As a result, as of today, Mr. Marks has 16,921,128 votes,
representing a combined voting power (i.e., Common Stock and Series
C Preferred Stock voting together) of 62.1%.
APPRAISAL RIGHTS
No dissent or appraisal rights are available under the Florida
Business Corporation Act or under our Articles of Incorporation, as
amended, as a result of the corporate action referenced herein.
This means that no shareholder is entitled to receive any cash or
other payment as a result of, or in connection with the corporate
action, even if a shareholder has not been given an opportunity to
vote.
INCORPORATION BY REFERENCE
The SEC allows us to “incorporate by reference” information into
this Information Statement, which means that we can disclose
important information to you by referring you to other documents
that we have filed separately with the SEC. The information
incorporated by reference is deemed to be part of this Information
Statement. This Information Statement incorporates by reference the
following documents:
|
1. |
Our Annual Report on Form 10-K for the year ended
December 31, 2020, filed with the SEC on April 13, 2021; |
|
2. |
Our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2021, filed with the SEC on May 17, 2021; |
|
3. |
Our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2021, filed with the SEC on August 23, 2021; |
|
4. |
Our Current Report on Form 8-K, Date of Event September
14, 2021, Filed September 20, 2021; and |
|
5. |
Our Current Report on Form 8-K, filed October 20,
2021. |
“HOUSEHOLDING” OF PROXY MATERIALS
Some banks, brokers and other nominee record holders may employ the
practice of “householding” proxy statements and annual reports.
This means that only one copy of this Consent Solicitation
Statement may have been sent to multiple stockholders residing at
the same household. If you would like to obtain an additional copy
of this Consent Solicitation Statement, please contact us at Grom
Social Enterprises, Inc., c/o Equinity Shareowner Services, 1110
Centre Pointe Curve, Suite 101, Mendota Heights MN 55120;
Attention: Mr. Chad Dalton. If you want to receive separate copies
of our proxy statements and annual reports in the future, or if you
are receiving multiple copies and would like to receive only one
copy for your household, you should contact your bank, broker or
other nominee record holder.
STOCKHOLDER PROPOSALS
There are no proposals by any security holder which are or could
have been included within this Consent Solicitation Statement.
STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS
The SEC has adopted rules that permit companies and intermediaries
such as brokers to satisfy delivery requirements for proxy
statements with respect to two or more stockholders sharing the
same address by delivering a single proxy statement addressed to
those stockholders. This process, which is commonly referred to as
“householding,” potentially provides extra convenience for
stockholders and cost savings for companies. We and some brokers
household proxy materials, delivering a single proxy statement to
multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders.
Once you have received notice from your broker or us that they are
or we will be householding materials to your address, householding
will continue until you are notified otherwise or until you revoke
your consent. If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate proxy
statement, or if you currently receive multiple proxy statements
and would prefer to participate in householding, please notify your
broker if your shares are held in a brokerage account or us if you
hold registered shares. You can notify us by sending a written
request to Grom Social Enterprises, Inc., c/o Equinity Shareowner
Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights MN
55120; Attention: Mr. Chad Dalton.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are required to comply with the reporting requirements of the
Exchange Act. For further information about us, you may refer to
our Annual Report and our Quarterly Reports. You can review these
filings at the public reference facility maintained by the SEC at
100 F Street, N.E., Washington, DC 20549. These filings are also
available electronically on the World Wide Web
at http://www.sec.gov.
The entire Consent Solicitation Statement is available for review
by each stockholder
on https://gromsocial.com/proxymaterials.
In accordance with Rule 14a-3(e)(1) under the Exchange Act, one
Consent Solicitation Statement will be delivered to two or more
stockholders who share an address, unless we have received contrary
instructions from one or more of the stockholders. We will deliver
promptly upon written or oral request a separate copy of the
Consent Solicitation Statement to a stockholder at a shared address
to which a single copy of the Consent Solicitation Statement was
delivered. Requests for additional copies of the Consent
Solicitation Statement, and requests that in the future separate
proxy statements be sent to stockholders who share an address,
should be directed to Grom Social Enterprises, Inc., c/o Equinity
Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota
Heights MN 55120; Attention: Mr. Chad Dalton. In addition,
stockholders who share a single address but receive multiple copies
of the Consent Solicitation Statement may request that in the
future they receive a single copy by contacting us at the address
set forth in the prior sentence.
By Order of the Board of Directors
Darren Marks
Chairman and Chief Executive Officer
November 5, 2021
Signature(s) in Box Please sign exactly as your name(s) appears on
the Request for Instruction . If held in joint tenancy, all persons
should sign . Trustees, administrators, etc . , should include
title and authority . Corporations should provide full name of
corporation and title of authorized officer signing the Request for
Instruction . Shareowner Services P.O. Box 64945 St. Paul, MN 55164
- 0945 The Grom Social Enterprises Inc. Board of Directors proposes
the following proposal: To approve the issuance of (i) $6,000,000
principal amount 10% Original Issue Discount Senior Secured
Convertible Note, convertible into Common Stock at $4.20 per share,
due 18 months from issuance (the “Second Tranche Note”), (ii) a
five - year common stock purchase warrant to purchase 1,041,194
shares of common stock at $4.20 per share (the “Second Tranche
Warrant”), and (iii) shares of common stock upon conversion or
redemption of the Second Tranche Note, and upon exercise of the
Second Tranche Warrant in accordance with their terms, which note
and warrant are both anticipated to be issued by the Company as
part of the second tranche of a private placement offering totaling
up to $10,400,000. For Against Abstain THIS REQUEST FOR INSTRUCTION
WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED AS WITHHOLDING CONSENT. Address
Change? Mark box, sign, and indicate changes below: Date :
INTERNET/MOBILE – www.proxypush.com/GROM ( PHONE – 1 - 866 - 883 -
3382 * MAIL – Mark, sign and date your instruction card and return
it in the postage - paid envelope provided.

GROM SOCIAL ENTERPRISES INC . REQUEST FOR INSTRUCTION Shareowner
Services, P . O . Box 64945 , St . Paul, MN 55164 - 0945 Notice is
hereby given that we are seeking the written consents of
stockholders holding a majority of shares (the “Majority
Shareholders”) of the common stock, par value $ 0 . 001 per share
(the “Common Stock”), and Series C 8 % convertible preferred stock,
par value $ 0 . 001 per share (the “Series C Stock”) voting on an
as converted basis, of Grom Social Enterprises, Inc . , a Florida
corporation (the “Company), as of the close of business on the
record date, October 7 , 2021 (the “Record Date”), acting in lieu
of a special meeting by written consents (the “Consents”) to
authorize and approve the proposal (the “Proposal”) on the reverse
of this page . See reverse for voting instructions. We are
requesting shareholder consents hereby because Nasdaq Rule 5635 (d)
(the “Nasdaq Rule”) requires that a Company obtain approval from
its shareholders prior to issuance of shares of Common Stock or any
securities convertible into or exercisable for Common Stock, that
in the aggregate equals or exceeds 20 % of the outstanding float
prior to the offering . The issuance of shares upon conversion or
redemption of the $ 6 , 000 , 000 of notes and exercise of the 1 ,
041 , 194 warrants that are part of this Proposal, when combined
with previously issued $ 4 . 4 M note and warrants in the same
offering, will exceed twenty percent ( 20 % ) or more of the issued
and outstanding number of shares of our Common Stock outstanding
prior to said offering, thereby requiring this request for
shareholder Consents . We intend to close on the $ 6 , 000 , 000
second tranche as soon as possible after receipt of properly
executed Consents from the Majority Shareholders of all classes,
voting together as a single class, and satisfaction of all other
conditions to closing, as more fully described herein . The Proxy
holders for the Series C Stock holders as well as certain members
of management holding greater than a majority of the voting power,
have already agreed to approve the Proposal . Our Board of
Directors (“Board”) has fixed October 7 , 2021 , as the Record Date
for holders of the Company’s Common Stock and Series C Stock
entitled to participate in this Consent Solicitation and to provide
Consents . This Notice of Consent Solicitation is being issued by
the Company and is intended to be mailed on or about November 5 ,
2021 , to all holders of our Common Stock and Series C Preferred
Stock as of the Record Date . We are not holding a special meeting
of stockholders in connection with the Proposal described herein .
The Consent Solicitation Statement on the following pages describes
the matters presented to stockholders herein . The entire Consent
Solicitation Statement is available for review by each stockholder
on https : //gromsocial . com/proxymaterials .
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