Grom Social Enterprises, Inc. announced that it has entered into a Securities Purchase Agreement with new investors Generating Alpha Ltd. and Nevis Corporation to issue 2 convertible promissory notes in the principal amount of $4,000,000 each at an issue price of $3,640,000 per note for the gross proceeds of $3,640,000 per note and warrants to acquire a total of 3,028,146 shares of the company?s common stock, par value $0.001 per share for total gross proceeds of $7,280,000 on November 9, 2023. The note in the aggregate principal amount of $4,000,000 has five year maturity and carries an interest rate of 9% of original issue discount of 9%. The company has agreed to make amortization payments each month in the amount of $83,033.42 in cash or in kind.

The note is convertible at the discretion of the investor into common stock at a price of $1.50. The investor may choose the alternate conversion price equal to 85% of the average of the three lowest trading prices during the previous 10 trading day period ending on the latest complete trading day prior to notice of conversion. In the event of an event of default, the conversion price shall be equal to 70% multiplied by the lower of the lowest intraday trading price in the 40 trading days prior to the applicable conversion date or the lowest closing bid price in the 40 trading days prior to the applicable conversion date.

The issuance of the notes and the warrants shall occur at two closings. The warrant to be issued at the first closing shall be a warrant for 1,514,073 shares of common stock and shall have an exercise price of $1.78 per share of common stock. The warrant to be issued at the second closing shall be a warrant for 1,514,073 shares of common stock and shall have an exercise price of $0.001 per share of common stock.

Subject to the terms and conditions set forth in the agreement, the first closing shall occur on the first business day following the receipt of the shareholder approval, and the second closing shall occur 35 business days following the date that the Registration Statement. The transaction is subject to shareholder's approval. The notes and warrants 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.