Grom Social Enterprises, Inc. Signs $8.0 Million Convertible Notes Financing Agreement

Boca Raton, FL – November 22, 2023 – Grom Social Enterprises, Inc. (NASDAQ: GROM; GROMW) (“Grom” or the “Company”), a media, technology and entertainment company dedicated to family-friendly programming, web filtering technology and safe social media for kids, today announced that on November 9, 2023, it had entered into a securities purchase agreement (as amended on November 20, 2023, the “SPA”) with a single institutional investor (the “Investor”) pursuant to which the Company has agreed to sell two convertible promissory notes of the Company (each, a “Note” and collectively, the “Notes”), with each Note having an initial principal amount of $4,000,000, for a price of $3,640,000 per Note. In connection with the purchase and sale of the Notes, the Company has agreed to issue to the Investor warrants (each, a “Warrant” and collectively, the “Warrants”) to acquire a total of 3,028,146 shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”) (the issuance of the Warrants together with the purchase and sale of the Notes, the “Transactions”).

The Transactions are subject to shareholder approval (the “Shareholder Approval”). The Company has agreed to secure Shareholder Approval for the SPA and the Transactions at a special meeting or via a written consent in lieu of a meeting.

Pursuant to the SPA, the issuance of the Notes and the Warrants shall occur at two closings (the “First Closing” and the “Second Closing”, each a “Closing”). The Warrants to be issued at the First Closing shall be (i) a Warrant for 757,036 shares of Common Stock with an exercise price of $1.78 per share of Common Stock and (ii) a Warrant for 757,036 shares of Common Stock with an exercise price of $.001 per share of Common Stock (together, the “First Closing Warrants”). The Warrants to be issued at the Second Closing shall be (i) a Warrant for 757,036 shares of Common Stock with an exercise price of $1.78 per share of Common Stock and (ii) a Warrant for 757,036 shares of Common Stock with an exercise price of $.001 per share of Common Stock (together, the “Second Closing Warrants”).

Subject to the terms and conditions set forth in the SPA, the First Closing shall occur on the first business day following the receipt of the Shareholder Approval, and the Second Closing shall occur thirty-five (35) business days following the date that the Registration Statement (as defined below) has been declared effective by the Securities and Exchange Commission (the “SEC”).

The shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants described above have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The securities were offered only to accredited investors.

Pursuant to the Registration Rights Agreement (the “Registration Rights Agreement”), the Company is required to file a registration statement (the “Registration Statement”) with the SEC covering shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants.

The Company intends to use the net proceeds from the private placement for general working capital and administrative purposes.

EF Hutton, division of Benchmark Investments, LLC, is acting as exclusive placement agent for the Transactions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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