UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT 

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 13, 2021

 

GROM SOCIAL ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

 

Florida 000-55585 46-5542401

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

  

2060 NW Boca Raton Blvd. #6
Boca Raton, Florida 33431
(Address of principal executive offices)

 

Registrant’s telephone number, including area code: (561) 287-5776

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbols Name of each exchange on which registered
None N/A N/A

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

     

 

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

Grom Social Enterprises, Inc., a Florida corporation (the “Company”), filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Articles of Incorporation, as previously amended (“Articles of Incorporation”), with the Secretary of State of the State of Florida, to effect a reverse stock split of the Company’s common stock, $0.001 par value per share (“Common Stock”), at a rate of 1-for-32 (the “Reverse Stock Split”), effective as of May 13, 2021.

 

As previously reported, on September 14, 2020, the Company’s board of directors (“Board”) approved, and on September 16, 2020, shareholders holding approximately 71.7% of the Company’s voting power, approved, by written consent, the granting of authority to the Board to amend the Company’s Articles of Incorporation to effect a reverse stock split of the issued and outstanding shares of the Company’s Common Stock, by a ratio of not less than 1-for-2 and not more than 1-for-25, with the exact ratio to be determined by the Board in its sole discretion. As also previously reported, on April 7, 2021, the Company’s Board approved, and on April 8, 2021, shareholders holding approximately 81.2% of the Company’s voting power, approved, by written consent, an increase to the range of the ratio for the reverse stock split to a ratio of not less than 1-for-2 and not more than 1-for-50.  On May 6, 2021, the Board (a) determined that, based upon the market price of the Company’s Common Stock, and with the intention to move forward with the Company’s listing on the Nasdaq Capital Market, it would be appropriate for the reverse split to be at a ratio of 1-for-32, and (b) authorized the Company to file the Certificate of Amendment to implement the Reverse Stock Split, to be effective as of May 13, 2021.  

 

On May 13, 2021, upon effectiveness of the Reverse Stock Split, every thirty-two (32) outstanding shares of the Company’s Common Stock were, without any further action by the Company, or any holder thereof, converted into, and automatically became, one (1) share of the Company’s Common Stock.  No fractional shares were issued as a result of the Reverse Stock Split.  In lieu thereof, fractional shares were rounded up to the nearest whole share.  All shares of Common Stock eliminated as a result of the Reverse Stock Split have been cancelled and returned to the Company’s authorized and unissued Common Stock, and the Company’s capital has been reduced by an amount equal to the par value of the shares of Common Stock so retired.

 

Prior to the filing of the Certificate of Amendment, the Company had 500,000,000 shares of Common Stock authorized, out of which 192,355,783 shares were issued and outstanding. As a result of the filing of the Certificate of Amendment, and resulting effectiveness of the Reverse Stock Split, the 192,355,783 shares of the Company’s Common Stock issued and outstanding immediately prior to the Reverse Stock Split were converted into approximately 6,011,119 shares of the Company’s Common Stock. The Reverse Stock Split did not change the Company’s current authorized number of shares of Common Stock, or its par value. The Reverse Stock Split also did not change the Company’s authorized, or issued and outstanding, number of shares of preferred stock, or its par value.

 

Except for de minimus adjustments that resulted from the treatment of fractional shares, the Reverse Stock Split did not have any dilutive effect on our shareholders, since each shareholder holds the same percentage of our Common Stock outstanding immediately following the Reverse Stock Split as such stockholder held immediately prior to the Reverse Stock Split.

 

As a result of the Reverse Stock Split, the number of shares of the Company’s Common Stock that may be purchased upon exercise of outstanding warrants, options, or other securities convertible into, or exercisable or exchangeable for, shares of our Common Stock, and the exercise or conversion prices for these securities, have also be ratably adjusted in accordance with their terms.

 

A copy of the Certificate of Amendment is filed as Exhibit 3.1 hereto and incorporated herein by reference. 

 

Item 8.01 Other Events.

 

The Company’s Common Stock continues to trade on a pre-split basis in the over-the-counter market, even though the Reverse Stock Split was effective on May 13, 2021. On May 17, 2021, the Financial Industry Regulatory Authority notified us that the Reverse Stock Split would take effect in the over-the-counter market at the start of business on May 19, 2021. At the open of trading on May 19, 2021, our trading symbol will change from “GRMM” to “GRMMD.” The “D” will be removed 20 business days after the split becomes effective in the market.

 

The Company currently anticipates that its shares of Common Stock will begin trading on the Nasdaq Capital Market under the symbol “GROM” on May 20, 2021, subject to obtaining requisite approval from The Nasdaq Stock Market LLC.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description

3.1

 

  Certificate of Amendment to the Articles of Incorporation of the Company, filed May 7, 2021, effective as of May 13, 2021

 

 

 

     

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  GROM SOCIAL ENTERPRISES, INC.

   
Date: May 17, 2021 By:  /s/ Melvin Leiner
    Melvin Leiner
Executive Vice President and Chief Financial Officer

 

 

Exhibit 3.1

 

CERTIFICATE OF AMENDMENT

 

TO

 

ARTICLES OF INCORPORATION

 

OF

 

GROM SOCIAL ENTERPRISES, INC.

 

Under Section 607.1001 of the Florida Business Corporation Act

 

IT IS HEREBY CERTIFIED THAT:

 

1.                  The name of the corporation is Grom Social Enterprises, Inc. (the “Corporation”).

 

2.                  The Articles of Incorporation of the Corporation were filed with the Secretary of State of the State of Florida on August 4, 2014. Amendments to the Articles of Incorporation were filed with the Secretary of State of the State of Florida on each of August 17, 2017, April 8, 2019, June 12, 2019 and August 4, 2020.

 

3.                  The Board of Directors of the Corporation, acting in accordance with the provisions of Section 607.0821 of the Florida Business Corporation Act (“FBCA”), adopted resolutions to amend the Articles of Incorporation of the Corporation, as amended, by adding the following paragraph to the end of ARTICLE I of the Articles of Incorporation of the Corporation, as amended, to read as follows:

 

“Pursuant to the FBCA, on May 13, 2021 at 9 a.m., the effective time of this Certificate of Amendment to the Articles of Incorporation (the “Effective Time”), each 32 shares of Common Stock issued and outstanding immediately prior to the Effective Time either issued and outstanding or held by the Corporation as treasury stock shall be combined into one (1) validly issued, fully paid and non-assessable share of Common Stock without any further action by the Corporation or the holder thereof (the “Reverse Stock Split”); provided that no fractional shares shall be issued to any holder and that instead of issuing such fractional shares, the Corporation shall round shares up to the nearest whole number. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (“Old Certificates”), shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate shall have been combined, subject to the treatment of fractional shares as described above.”

 

4.                  This Certificate of Amendment to the Articles of Incorporation was duly adopted in accordance with Section 607.1001 of the FBCA. The Board duly adopted resolutions setting forth and declaring advisable this Certificate of Amendment and submitted the proposed amendment to the shareholders of the Corporation. The Certificate of Amendment was duly approved by the required vote of the shareholders of the Corporation in accordance with Section 607.0704 of the FBCA.

 

5.                  This Certificate of Amendment shall become effective as of May 13, 2021 at 9 a.m.

 

 

IN WITNESS WHEREOF, this Certificate of Amendment to the Articles of Incorporation has been executed as of this 6 day of May, 2021.

 

GROM SOCIAL ENTERPRISES, INC.

 

 

By: /s/ Darren Marks

Darren Marks

Chief Executive Officer