User Engagement and Platform Features - As of March 1, 2024, Grom Social platform had approximately 1,550 monthly active users (MAUs) with an average online duration of 3.5 minutes per user[76] - 68% of pre-teens were reported to be using social media applications as of December 2023[90] - Grom Social app was approved in May 2019 for both Apple Store and Google Play Store within their family designated sections[77] - Grom Social platform employs sophisticated software to monitor posts for inappropriate content, ensuring a safe environment for children[86] - The company has established a comprehensive reward system to incentivize positive interactions among users on the Grom Social platform[84] - Grom Social's safeguards include parental involvement in account creation and content monitoring to promote digital citizenship[82] - GSOC operates in a competitive landscape with major players like Facebook, YouTube, and TikTok, which require parental consent for users under 13[168] - The platform features content created by and for kids, enhancing engagement with the target audience[171] - GSOC offers a safe and controlled environment for children, distinguishing itself from competitors[170] - Real-time monitoring and advanced content filtering provide unmatched protection against inappropriate content[172] - The Grom Social app is COPPA-compliant, offering features like live commenting and video sharing, ensuring a secure online environment for children[214] Financial Performance - For the year ended December 31, 2023, the Company reported consolidated sales of $4,041,020, a decrease of 25.5% from $5,426,501 in 2022[117] - The gross profit for 2023 was $1,366,580, down from $1,761,735 in 2022, reflecting a gross margin of approximately 33.9% compared to 32.4% in the previous year[111] - The total operating expenses for 2023 amounted to $14,685,211, an increase from $20,432,157 in 2022, primarily due to higher impairment of goodwill[111] - The net loss for 2023 was $13,879,157, compared to a net loss of $16,766,738 in 2022, indicating a reduction in losses year-over-year[111] - The Company reported a loss from operations of $13,318,631 for the year ended December 31, 2023, compared to a loss of $18,670,422 in 2022[111] - The company has an accumulated deficit of $96.7 million as of December 31, 2023, indicating significant operating losses since inception[262] - The company is exploring alternative sources of financing due to insufficient operational cash flow to fund anticipated operations, raising substantial doubt about its ability to continue as a going concern[263] - The company has incurred significant operating losses and will need to raise additional funds until consolidated operations become profitable[263] Business Segments and Acquisitions - The Company has three reportable business segments: Animation, Original Content, and Social & Technology, with Animation generating sales of $3,375,751 in 2023[107][111] - The Company signed a non-binding letter of intent to acquire Arctic7, Inc., a service provider in the gaming industry, on March 5, 2024[124] - The acquisition of Curiosity Ink Media LLC involved the issuance of 1,771,883 shares of common stock valued at $2.82 per share[159] - The current growth strategy includes expanding core products and pursuing strategic acquisitions to enhance the Company's portfolio[166] Internal Controls and Compliance - As of December 31, 2023, the Company's disclosure controls and procedures were deemed ineffective by the principal executive officer and principal financial officer[131] - The company has identified material weaknesses in its internal controls due to limited resources and inadequate segregation of duties[181] - As of December 31, 2023, the company's internal controls over financial reporting were assessed as ineffective[187] - Management has implemented a remediation plan to address identified weaknesses, including hiring qualified personnel and improving review processes[189] Revenue Recognition and Accounting Policies - Ecommerce revenue is recognized when control of the product passes to customers, with revenue presented net of various fixed percentage price allocations[147] - The company recognizes substantially all animation revenue over time as performance obligations are satisfied[138] - Revenue recognition follows ASC Topic 606, with revenue recognized based on the extent of progress made towards completion of performance obligations[259] - Prepublication costs are amortized on a straight-line basis over a two- to five-year period based on expected future revenue[249] - The Audit Committee meets quarterly to discuss financial statements and corporate matters, ensuring oversight of accounting policies[254] Employee and Operational Structure - As of April 11, 2024, the company employed 18 full-time employees, 3 part-time employees, and 2 independent contractors in the U.S., along with 68 full-time employees, 37 part-time employees, and 198 contracted employees in the Philippines[232] - The company currently owns seven trademarks, with the earliest registration date being January 14, 2014, and the latest pending trademark filed on September 14, 2022[229] - The company holds thirteen copyrights, with the earliest registration date being July 20, 2012, and the most recent copyright filed on March 11, 2024[230] Market and Regulatory Environment - The company is subject to evolving U.S. federal, state, and foreign laws regarding user privacy and data protection, which could impact business operations[222] - The nutritional supplements intended for marketing to children are governed by the U.S. Food and Drug Administration (FDA) regulations[226] - The global nutritional supplements market was valued at $273.9 billion in 2018 and is expected to grow at a compound annual growth rate of 6.4% from 2019 to 2025[219] Financial Instruments and Risk Management - The company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risk[238] - The estimated fair value of assets and liabilities acquired in business combinations utilizes inputs classified as Level 3 in the fair value hierarchy[236] - The company’s cash and cash equivalents are exposed to concentration of credit risk, with management regularly monitoring financial institutions[242] - The company’s accounts receivable includes unbilled accounts receivable, which are contract assets related to amounts that are unbilled due to contractual terms[245]

BOCA RATON, Fla., April 15, 2024 (GLOBE NEWSWIRE) -- Top Draw Animation (TDA), a leading global supplier of  premium 2D animation production services, and award-winning division of Grom Social Enterprises Inc. (NASDAQ:GROM), today announced that the former VP of Technicolor's Animation Games & Production (India), Cyrus Mistry, has been named TDA's Chief Operating Officer, effective immediately. In his new role, Mistry has relocated from India to the company's state-of-the-art studio in Manila, Philippines, ...

BOCA RATON, Fla., April 04, 2024 (GLOBE NEWSWIRE) -- Grom Social Enterprises, Inc (NASDAQ:GROM), which recently announced that it has entered into a Letter of Intent (LOI) to acquire Arctic7, the Austin, Texas-based game and co-development services provider, today announced the formation of a synergy council that will, upon completion of the acquisition, explore gaming production and other opportunities for ancillary revenue growth. Grom, a media, technology, and entertainment company focused on family-frie ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ________ to _________ Commission File Number: 001-40409 Grom Social Enterprises, Inc. (Exact name of registrant as specified in its charter) | Florida | 46-55 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ________ to _________ Commission File Number: 001-40409 Grom Social Enterprises, Inc. (Exact name of registrant as specified in its charter) | Florida | 46-5542401 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ________ to _________ Commission File Number: 001-40409 Grom Social Enterprises, Inc. (Exact name of registrant as specified in its charter) | Florida | 46-554240 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ________ to _________ Commission File Number: 001-40409 Grom Social Enterprises, Inc. (Exact name of registrant as specified in its charter) | Florida | 46-5542401 | | ...