Grom Social enters $25M SPA with Generating Alpha, amends prior deal, warrant price cut to $0.001

Grom Social Enterprises, Inc.

On March 11, 2024, Grom Social amended the November 2023 SPA to reduce Warrant A and Warrant C exercise prices from $1.78 to $0.001 per share.
The amendment added a mandatory reverse stock split covenant if the closing price falls below $0.25 for five consecutive trading days.
Grom Social entered a new March 2024 SPA with Generating Alpha Ltd. to sell up to $25 million of common stock at 85% of the lowest traded price over 10 days.
A new warrant for 2,314,814 shares at $0.001 per share was issued as a commitment fee in the March 2024 SPA.
The convertible note was amended to include a conversion floor price of $0.25, with additional cash-only note issuance if the trading price is below that floor.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Grom Social Enterprises, Inc. amended First Note Amendment to Convertible Promissory Note with Generating Alpha Ltd. valued at Added that Conversion Price shall not be less than $0.25 (effective 2024-03-11).

Action: amendment
Agreement: credit facility
Counterparty: Generating Alpha Ltd.
Value: Added that Conversion Price shall not be less than $0.25
Effective: 2024-03-11

Exact text from the filing

In connection with the Second Amendment, the Company also entered into an amendment (the “ First Note Amendment ”) to the Convertible Promissory Note originally dated November 9, 2023 (together with the First Note Amendment, the “ Note ”) with the Investor, pursuant to which Section 1.1(a) of the Note was amended to add that in no event shall the Conversion Price (as defined in the Note) be less than $0.25.

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Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Grom Social Enterprises, Inc. entered into Registration Rights Agreement with Generating Alpha Ltd. valued at Company to file registration statement within 60 days and have it declared effective within 30-90 da (effective 2024-03-11).

Action: entry
Counterparty: Generating Alpha Ltd.
Value: Company to file registration statement within 60 days and have it declared effective within 30-90 da
Effective: 2024-03-11

Exact text from the filing

In connection with the March 2024 SPA, the Company entered into a Registration Rights Agreement (the “ Registration Rights Agreement ”) with the Investor, pursuant to which the Company has agreed to use its commercially reasonable efforts to file a registration statement (the “ Registration Statement ”) with the SEC on a date no later than sixty (60) days following the date thereof and to have the Registration Statement declared effective by the SEC within thirty (30) calendar days, but no more than ninety (90) calendar days, after the Company has filed the Registration Statement.

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Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Grom Social Enterprises, Inc. amended Second Amendment to the November 2023 SPA with Generating Alpha Ltd. valued at Exercise price of Warrants A and C amended from $1.78 to $0.001 per share (effective 2024-03-11).

Action: amendment
Agreement: equity purchase
Counterparty: Generating Alpha Ltd.
Value: Exercise price of Warrants A and C amended from $1.78 to $0.001 per share
Effective: 2024-03-11

Exact text from the filing

On March 11, 2024, Grom Social Enterprises, Inc., a Florida corporation (the “ Company ”), entered into a second amendment agreement (the “ Second Amendment ”) to the Securities Purchase Agreement originally dated November 9, 2023 and previously amended on November 20, 2023 (the “ First Amendment ”, and together with the Second Amendment, the “ November 2023 SPA ”) with Generating Alpha Ltd., a Saint Kitts and Nevis Corporation (the “ Investor ”).

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Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Grom Social Enterprises, Inc. entered into March 2024 SPA with Generating Alpha Ltd. valued at Up to $25 million of Common Stock; purchase price 85% of lowest traded price during 10 Trading Days; (effective 2024-03-11).

Action: entry
Agreement: equity purchase
Counterparty: Generating Alpha Ltd.
Value: Up to $25 million of Common Stock; purchase price 85% of lowest traded price during 10 Trading Days;
Effective: 2024-03-11

Exact text from the filing

On March 11, 2024, the Company entered into a Securities Purchase Agreement (the “ March 2024 SPA ”) with the Investor, pursuant to which the Company has agreed to issue and sell to the Investor from time to time up to $25 million of Common Stock.

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Source: SEC EDGAR

accession 0001683168-24-001501

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