january 2020 investor presentation - grom social€¦ · overview •grom social enterprises...

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A New Media Destination for the 21st Century. January 2020 Investor Presentation

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A New Media Destination for the 21st Century.

January 2020Investor Presentation

OTCQB: GRMM | 2

Disclaimers / Statements

DisclaimerThis document is based on information provided by Grom Social Enterprises, Inc. (OTC:GRMM) (the “Company”, “our”, or “we”) and other sources that theCompany believes are reliable. Nothing in this document is, or may be relied upon as, a promise or representation by the Company as to the past or the futureinformation or results. This is not an offer or the solicitation of an offer to buy any securities of the Company, and readers should not construe the contents ofthis document as investment, legal or tax advice. The information contained in this document is made as of the date hereof, and does not reflect any events thatmay occur subsequent to the date hereof. The Company undertakes no duty or obligation to update or revise the information included in this presentation.

Forward Looking StatementsThis presentation includes forward-looking statements that are made pursuant to the "safe harbor" provisions of the private securities litigation reform act of1995. Forward-looking statements reflect our current views with respect to future events and involve inherent risks and uncertainties which could cause actualresults to differ materially from our historical experience and present expectations or projections as a result of various factors, including those risks anduncertainties described in the risk factors and in management’s discussion and analysis of financial condition and results of operations sections of our annualreport on form 10-k and subsequently filed quarterly reports on form 10-q, filed with the Securities and Exchange Commission. One can find many (but not all) ofthese statements by looking for terms such as "believe," "expect," “hope,” ”project,” "may," "will," "should," “would,” "could," "seek," "intend," "plan,""estimate," "anticipate" and similar terms. all statements other than statements of historical facts included in this presentation, including statements regardingour strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements.

We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon anysuch forward-looking statements, which represent our estimates and assumptions only as of the date hereof. Except as required by law, we undertake noobligation to update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information,future developments or otherwise. We anticipate that subsequent events and developments will cause our views to change.

OTCQB: GRMM | 3

Overview

• Grom Social Enterprises (OTCQB: GRMM) is a media, technology and entertainment company for kids.

- Grom Social has reached over 17 million users since inception

- Recently launched Grom Social mobile app expands user base

• Profitable Top Draw Animation subsidiary creates 2D content for tier-1 studios

- Significant content creation synergies with Grom’s social media platform

- Blue chip clients include Disney, Warner Brothers and DreamWorks

• Attractive & scalable business model with high gross margins (44.6%) 2

• Proven management team with a strong track record in commercialization, technology and media verticals

Grom Social Enterprises (OTCQB: GRMM)

Share Price1 $0.09

Market Cap1 $15.0 M

Revenues (TTM)2 $9.1 M

Gross Margin (TTM)2 44.6%

Enterprise Value $17.4 M

FD Shares O/S1 193.6 M

Float 162.4 M

HeadquartersBoca

Raton, FL

Employees1,3 515

Insider Ownership1 29.9%Mission:

Making the internet safe for kids through teaching and monitoring, giving parents

the tools they need for piece of mind.

1) As of January 6, 20202) TTM = Trailing twelve months ended

September 30, 20193) Employees are predominantly animation

staff in Southeast Asia

OTCQB: GRMM | 4

Media Coverage

social media

story

Hottestth

– Entrepreneur Magazine

5

The next Mark Zuckerberg?Is Zach Marks

OTCQB: GRMM | 5

Stats

1,250Hours of exclusive

live streaming contentDisneyDreamWorksNickelodeon

Warner BrothersHasbro ToysScholastic

Total users on all platforms since inception 6/2012.

Content Hours

BillionsWeb attempts in schools we filter

Security

6

Blue Chip Clients

7 MillionParent Emails Collected

Since Inception

Parents Reached

10 Million +Children that have used our

platforms since inception

Children/Students Reached

17 Million +

Families Reached

Children, parents & students who have used our platforms

OTCQB: GRMM | 6

Our Subsidiaries

Top Draw Animation, IncWorld-Class Animation Studio

Grom Social, IncSafe, Social Media App for Kids

Grom Educational Services, IncWeb Filtering for Schools, Government and Private Business

OTCQB: GRMM | 7OTCQB: GRMM | 7

Top Draw Animation, IncWorld-Class Animation Studio

• Award-winning 2D animation studio since 1999

• Over 500 artists

• State-of-the-art studio in Manila, Philippines

• The company produces:

o Over 250 half-hour episodes of 2D animation each year

o Over 2,000 half hours created

OTCQB: GRMM | 8

Top Draw Animation, IncWorld-Class Animation Studio

Blue Chip Clients Produced:

• Disney Television Animation• Warner Bros.• Nickelodeon• Cartoon Network• Scholastic• Hasbro Toys

The Hollow

Netflix

My Little Pony

DHX Media

The Tom & Jerry Show

Slap Happy Cartoons

Penn Zero

Disney Television Animation

George of the Jungle

DHX Media

Monster Beach

Cartoon Network

OTCQB: GRMM | 9

Top Draw Animation, IncWorld-Class Animation Studio

Top Draw Animation enters into 3D animation market with Tier-1 Animation and media giant.

Animation Revenue EBITDA

2017 $6,803,380 $1,574,103

2018 $7,801,157 $2,333,304

OTCQB: GRMM | 10

Grom Social, Inc.Safe, Social Media App for Kids

Are Kids Safe Online?

Many parents worry about their child’s online safety.

• Who are they communicating with?• Is the media content age appropriate?• Is the media content consistent with the parent’s values? • How can I monitor their activity?

Yes, Thanks to Grom SocialGrom Social keeps kids safe, and parents worry free.

OTCQB: GRMM | 11

Grom Social, Inc.Safe, Social Media App for Kids

“As pioneers in the kids social media space, we are the first and only company to create a site for kids by kids’ that is monitored 24/7 and requires parent or guardian approval to participate.”

• COPPA-Compliant• Ages 5-16• Parental Oversight• Monitored 24/7• Age Appropriate Content

OTCQB: GRMM | 11

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Grom Social, Inc.Safe, Social Media App for Kids

Grom Social App is what Kids Want!

We have included all the popular features of social networks and provided them to kids in a safe platform for kids. Making us the only COPPA-Compliant application to offer these features.

Features:• Record and Share Videos• Real Commenting• Hashtags• Streaming Video Content• And More

Exclusive Features:• Direct messaging to kids• Video recording and posting • Exclusive Grom TV content• Message and chat with

cartoon characters

OTCQB: GRMM | 12

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Safe Platform + Teaching Online Safety = Competitive Advantage

Giving kids a safe platform keeps them safe while using it, but teaching safety keeps kids safe online indefinitely.

• Digital Citizenship Course• Exclusive Safety Messaging• Safe Kid Friendly Advertising• Live 24/7 Monitoring• Limited Data Collection

OTCQB: GRMM | 13

Grom Social, Inc.Safe, Social Media App for Kids

OTCQB: GRMM | 14

Grom Social, Inc.Safe, Social Media App for Kids

MamaBear Parenting Application

Parents can protect all their children with our MamaBear parenting app while monitoring what their child does on Grom Social.

• Social Media Monitoring• Location Tracking with Alerts• Family News• Speeding Alerts

OTCQB: GRMM | 14

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Grom Social KPI’s

Device Usage3

Gender Breakdown3

Active User Increase Since APP Launch Geographical Breakdown3

Average Daily User Activity – New App

Total Users1 18,361,893

Total Monthly Active Users2 2,203,673

Average Child Online Duration3 56.4 Minutes

Average Parent Online Duration3 4.3 Minutes

Bounce Rate4 29.8%

United States 41.0%

India 15.9%

Brazil 12.5%

Indonesia 11.0%

Australia 9.4%

User Data

Male 43%

Female 57%

Mobile 78%

Tablet 16%

Desktop 6%

1) Total users (incl. parents) on all platforms since inception June 1, 2012.2) Total monthly active users as of December 31, 2019.

3) Device usage, gender breakdown, most popular sections and geographical breakdown as are as of December 31, 2019.4) Bounce Rate is as % of visitors to a website who navigate away from the site after viewing only one page.5) Data obtained from Google Data Analytics, and Joomla Content Management System.

May June July Aug Sept

100

90

80

70

60

50

40

30

20

10

Online duration increased 10x

6%

78%

16%

OTCQB: GRMM | 16

-

World Ranked #2 Grom Social Ambassador,

Caroline Marks Qualifies for the 2020 Olympics

2019 Media Appearances:

● Today Show● Good Morning America● Sports Illustrated● Jimmy Kimmel

● Time Magazine● USA Today● Vanity Fair● Forbes● People Magazine

OTCQB: GRMM | 17

What is a User Worth?

Company Market Cap Active Users User Value

$364 B 2.0 B $182

$227 B 1.4 B $158

$42 B 600 M $70

$24 B 302 M $81

$24 B 364 M $69

$4.0 B 160 M $28

$3.0 B 142 M $25

Source: Arkenea

OTCQB: GRMM | 18

Grom Educational Services, IncWeb Filtering for Schools, Government and Private Business

Protecting Kids In School

Grom Educational Services provides schools K-12 with online safety tools for CIPA compliance and to provide and teach online safety in schools.

Also provides funnel for new Grom Social users at zero cost.

• Web Filtering• Online Activity Monitoring• Digital Citizenship License Course• Exclusive Educational Content

Children’s Internet Protection Act (CIPA) requires technology protection measures and internet safety policies for any government facility providing internet access.

OTCQB: GRMM | 19

Our Team

| Executive Management

Zach Marks – Founder / Chief Content Developer

Darren Marks – Chairman / CEO / PresidentOver 30 years of public company experience at the CEO and Director level

Melvin Leiner – Vice Chairman / Executive Vice President / CFOOver 40 years of high-profile senior executive level experience in the public and private sectors

Wayne Dearing – Founder and Managing Director of Top Draw AnimationOver 40 years of industry experience as manager and executive

| Independent Directors

Robert Stevens Founded Somerset Capital Ltd in 2001

Norman RosenthalFounded Tempest Systems Inc. in 1986

Dr. Thomas J. RutherfordWorld-renowned oncologist and a national expert in cancer

OTCQB: GRMM | 20

Key Highlights

$0.8 MillionFY18 WebFiltering Revenue

$7.8 MillionFY18 Animation Revenue

Pre-RevenueNew Grom App

2019 Grom Revenue Streams• Advertising• Monthly Subscription

Future Grom Revenue Streams • Merchandise• Corporate Sponsorship• Content Distribution• Polling/Research

• Blue Chip Clients including Disney, Warner Brothers and DreamWorks

• Strong partnerships and initiatives driving platform adoption and growth

• TDA produces animation for some of the largest distribution platforms in the world

• Grom Social keeps kids safe, and parents worry free

• Grom Educational provides K-12 schools with online safety tools

OTCQB: GRMM | 21

Contact Us

Investor RelationsGreg Falesnik or Luke ZimmermanMZ Group – MZ North AmericaMain: (949) [email protected]

2060 NW Boca Raton Blvd., Ste. #6Boca Raton, Florida 33431

gromsocial.com