Item 1.01 Entry into a Material Definitive Agreement






Curiosity Ink Acquisition

On August 19, 2021 (the "Closing Date"), the Company consummated the acquisition ("Acquisition") of Curiosity Ink Media LLC, a Delaware limited liability company ("Curiosity Ink" or "CIM"), in accordance with the terms of the Membership Interests Purchase Agreement dated July 29, 2021 ("Purchase Agreement") among the Company, Curiosity Ink and the owners of all of Curiosity Ink's outstanding membership interests ("Sellers"). The execution of the Purchase Agreement was previously reported on a Current Report on Form 8-K filed with the Securities and Exchange Commission on August 4, 2021. The Company purchased from Sellers in the aggregate 80% of Curiosity Ink's outstanding membership interests (the "Purchased Interests") for consideration comprising of (A) $5,000,000 in value paid at closing through the issuance to Sellers of an aggregate of 1,771,883 unregistered (i.e., restricted) shares of the Company's Common Stock, valued at $2.82 per share based on the 20-day volume-weighted average price (VWAP) of the Common Stock at close of trading on August 18, 2021; and (B) up to an additional $17,500,000 in value payable in the future in a combination of 50% cash ("Contingent Cash") and 50% shares of Company Common Stock ("Contingent Shares") if Curiosity Ink achieves certain specific earnings targets post-closing. The number of Contingent Shares will be based on the VWAP of Company's Common Stock as of the relevant determination date(s). As a result of the Acquisition, the Company owns 80% and the Sellers collectively own 20% of Curiosity Ink.

On the Closing Date, the Company entered into a new CIM limited liability company agreement with Sellers ("CIM LLC Agreement") detailing their mutual agreement with regard to the management, operation and regulation of CIM and its membership interests owned by such parties. Under the CIM LLC Agreement, CIM's business and affairs are managed, operated and controlled exclusively by or under the direction of the Board of Managers, the majority (three) of which are selected by the Company and the remainder (two) by Sellers Russell Hicks and Brent Watts. Any determination by or consent and decision of the Board of Managers may be made only by the affirmative vote of a majority of CIM's Board of Managers

In addition, pursuant to the terms of the Purchase Agreement on the Closing Date the Company paid or delivered to Curiosity Ink, as a capital contribution: (i) $400,000 in cash; and (ii) Grom's $278,000 principal amount 8% convertible promissory note ("Convertible Note"), which cash and Convertible Note Curiosity Ink then effectively transferred to Messrs. Hicks and Watts in order to satisfy and pay in full the outstanding loans and/or advances previously made by such Sellers to Curiosity Ink (aggregating $678,000) at earlier dates. Such transferred Convertible Notes, now held by Messrs. Hicks and Watts, have an 18-month term, are convertible at the option of the holder into shares of Company Common Stock at a conversion price of $3.28 per share, and may be prepaid by the Company at any time, in whole or in part, without penalty or premium. The Convertible Notes are subordinated by their terms to the Company's senior indebtedness.





Employment Agreements

In connection with the closing of the Acquisition, on the Closing Date, the Company entered into Employment Agreements with Mr. Hicks (to serve as President and Chief Content Officer of Curiosity Ink) and Mr. Watts (to serve as Chief Creative Officer of Curiosity Ink) for initial annual base salaries of $220,000 and $220,000, respectively, minimum 5% annual increases, and annual bonus opportunities of up to 80% of base salary. The term of these Employment Agreements is initially three years, with an automatic renewal for an additional two-year term and then for successive one-year terms unless notice of termination is given by either party at least 60 days prior to the end of the then current term. Grom also granted to Mr. Hicks 74,000 and Mr. Watts 67,250 non-qualified options ("NQOs") to purchase Grom Common Stock at an exercise price of $2.98 per share, which NQOs vest one-third on each of the first, second and third anniversary of the closing date. If either Employment Agreement is terminated by the Company without cause or by the executive for good reason (each as defined therein), then the executive will be entitled to receive a lump sum cash severance payment of between 25% and 100% of base salary depending on the timing of the termination. The Employment Agreements also contain customary work product, confidentiality, non-competition and non-solicitation provisions.







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The foregoing descriptions of the Acquisition, Purchase Agreement, CIM LLC . . .

Item 2.01 Completion of Acquisition or Disposition of Assets.

Reference is made to the disclosure set forth under Item 1.01 above with respect to the completion of the acquisition of Curiosity Ink, which disclosure is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an


          Off-Balance Sheet Arrangement of a Registrant.

Reference is made to the disclosure set forth under Item 1.01 above with respect to the issuance of the Note, which disclosure is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.

The issuance of the shares of common stock issued to the Sellers will be exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), as transactions by an issuer not involving a public offering.

Item 7.01 Regulation FD Disclosure.

On August 23, 2021, the Company issued a press release announcing the closing of the Acquisition and related matters.

The information in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing of ours under the Securities Act, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Form 8-K in such filing.





Cautionary Statements

This filing includes "forward-looking statements." All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such 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 can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect the Company's operations, financial performance, and other factors as discussed in the Company's filings with the Securities and Exchange Commission ("SEC"). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports the Company files with the SEC. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." The Company does not undertake any duty to update any forward-looking statement except as required by law.









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Item 9.01 Financial Statements and Exhibits.






         (a)  Financial Statements of Business Acquired.

         In accordance with Item 9.01(a), Curiosity Ink Media LLC's (i) audited
         balance sheets as of December 31, 2020 and 2019 and 2018 and statement of
         operations, statement of changes in stockholder's equity and statement of
         cash flows for the years ended December 31, 2020 and 2019 are filed with
         this Report as Exhibit 99.2 and (ii) unaudited balance sheet as of June
         30, 2021 and statement of operations, statement of changes in
         stockholder's equity and statement of cash flows for the six months ended
         June 30, 2021 are filed with this Report as Exhibit 99.3

         (b)  Pro Forma Financial Information.

         In accordance with Item 9.01(b), the Company's pro forma unaudited
         combined financial statements for the fiscal year ended December 31, 2020
         and for the six months ended June 30, 2021 are filed with this Report as
         Exhibit 99.4.

         (d)  Exhibits




Exhibit
No.       Description of Exhibit
4.1         8% Convertible Promissory Note, dated August 19, 2021, issued by Grom
          Social Enterprises, Inc. to Curiosity Ink Media LLC   (1)

10.1        Membership Interest Purchase Agreement dated July 29, 2021, by and
          among the Company, Sellers and CIM   (filed with the SEC as Exhibit 10.1
          to the Company's Current Report on Form 8-K, dated August 4, 2021, which
          exhibit is incorporated herein by reference)

10.2        Amended and Restated Limited Liability Company Agreement dated as of
          August 19, 2021 by and among CIM, Grom and Sellers   (1)

10.3        Employment Agreement dated as of August 19, 2021 between the Company
          and Russell Hicks   (1)

10.4        Non-Qualified Stock Option Agreement dated August 19, 2021 between the
          Company and Russell Hicks   (1)

10.5        Employment Agreement dated as of August 19, 2021 between the Company
          and Brent Watts   (1)

10.6        Non-Qualified Stock Option Agreement dated August 19, 2021 between the
          Company and Brent Watts   (1)

99.1        Press Release, dated August 23, 2021   (1)

99.2        Audited balance sheets as of December 31, 2020 and 2019 and statement
          of operations, statement of changes in shareholder's equity and statement
          of cash flows for the years ended December 31, 2020 and 2019 for
          Curiosity Ink Media LLC

99.3        Unaudited balance sheets as of June 30 30, 2021 and statement of
          operations, statement of changes in shareholder's equity and statement of
          cash flows for the six months ended June 30, 2021 for Curiosity Ink Media
          LLC

99.4        Proforma unaudited combined financial statements for the year ended
          December 31, 2020 and for the six months ended June 30, 2021

(1) Incorporated by reference to the corresponding exhibit of the Company's

Current Report on Form 8-K filed with the SEC on August 24, 2021.








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