Exhibit 99.2
GROM SOCIAL ENTERPRISES INC.
Proforma Consolidated Balance Sheets
September 30, 2018 (Unaudited)
| | | September 30, 2018 | | | Proforma Adjustments for the of Period October 1, 2018 through January 15,2019 | | | Proforma Combined (g) | |
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| ASSETS | | | | | | | | | | | | |
| Current assets: | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 402,582 | | | $ | 1,012,265 | | (c)(d)(e) | $ | 1,414,847 | |
| Accounts receivable | | | 510,241 | | | | – | | | | 510,241 | |
| Inventory, net | | | 547,510 | | | | – | | | | 547,510 | |
| Prepaid expenses and other current assets | | | 605,568 | | | | – | | | | 605,568 | |
| Total current assets | | | 2,065,901 | | | | 1,012,265 | | | | 3,078,166 | |
| Property and equipment, net | | | 1,270,694 | | | | – | | | | 1,270,694 | |
| Goodwill | | | 8,853,261 | | | | – | | | | 8,853,261 | |
| Intangible assets, net | | | 6,436,900 | | | | – | | | | 6,436,900 | |
| Deferred tax assets | | | 207,464 | | | | – | | | | 207,464 | |
| Other assets | | | 72,433 | | | | – | | | | 72,433 | |
| Total assets | | $ | 18,906,653 | | | $ | 1,012,265 | | | $ | 19,918,918 | |
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| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | |
| Current liabilities: | | | | | | | | | | | | |
| Accounts payable | | $ | 776,706 | | | $ | – | | | $ | 776,706 | |
| Accrued liabilities | | | 1,889,218 | | | | (150,000 | ) | (b) | | 1,739,218 | |
| Advanced payments and deferred revenues | | | 1,474,799 | | | | – | | | | 1,474,799 | |
| Senior secured promissory notes, net -- current | | | 3,800,000 | | | | (3,800,000 | ) | (f) | | – | |
| Income taxes payable | | | 20,215 | | | | – | | | | 20,215 | |
| Related party payables | | | 1,834,029 | | | | (500,000 | ) | (a) | | 1,334,029 | |
| Total current liabilities | | | 9,794,967 | | | | (4,450,000 | ) | | | 5,344,967 | |
| Convertible debentures, net of loan discounts | | | 2,773,961 | | | | 252,625 | | (d)(e) | | 3,026,586 | |
| Long term note payable | | | | | | | 3,584,000 | | | | 3,584,000 | |
| Contingent purchase consideration | | | 429,000 | | | | – | | | | 429,000 | |
| Other noncurrent liabilities | | | 221,210 | | | | – | | | | 221,210 | |
| Total liabilities | | | 13,219,138 | | | | (613,375 | ) | | | 12,605,763 | |
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| Commitments and contingencies | | | – | | | | – | | | | – | |
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| Stockholders' Equity: | | | | | | | | | | | | |
| Preferred stock | | | – | | | | – | | | | – | |
| Common stock | | | 129,657 | | | | 7,341 | | (a)(b)(c)(d)(e)(f) | | 136,998 | |
| Additional paid-in capital | | | 50,201,965 | | | | 1,618,299 | | (a)(b)(c)(d)(e)(f) | | 51,820,264 | |
| Accumulated earnings (deficit) | | | (44,425,597 | ) | | | – | | | | (44,425,597 | ) |
| Accumulated other comprehensive income | | | (218,510 | ) | | | – | | | | (218,510 | ) |
| Total stockholders' equity | | | 5,687,515 | | | | 1,625,640 | | | | 7,313,155 | |
| Total liabilities and equity | | $ | 18,906,653 | | | $ | 1,012,265 | | | $ | 19,918,918 | |
(a) On October 12, 2018, Messrs. Marks and Leiner, the Company's executive officers, converted $500,000 of their non-interesting bearing loans into 1,612,903 shares of the Company's common stock at a price of $0.31 per share. This transaction increased the Company's consolidated stockholders'equity by $500,000.
(b) On October 25, 2018, Mr. Wayne Dearing, president of the Company's subsidiary TD Holdings Ltd, converted $150,000 of accrued interest due on his secured promissory note into 483,871 shares of the Company's common stock at a price of $0.31 per share. This transaction increased the Company's consolidated stockholders'equity by $150,000.
(c) During October and November 2018, the Company accepted subscriptions under a private placement to issue an aggregate 3,549,999 shares of its common stock to six existing accredited investors at a price of $0.15 per share. This transaction increased the Company's consolidated stockholders'equity by $532,500.
(d) In October 2018, the Company issued a $50,000 original discount note to an existing accredited investor. The note bears interest at 10% and entitled the noteholder to receive 50,000 shares of the Company's common stock (valued at $0.32 per share) as an incentive to invest. The Company received net proceeds of $40,000. All issuance costs will be amortized as interest expense over the life of the note. This transaction increased the Company's consolidated stockholders' equity by $16,000.
(e) On November 30, 2018, the Company issued an aggregate $552,000 in convertible notes to various accredited investors through a financial institution. The notes bear interest at 12% and entitled the noteholders (incentive to invest) and institution (transaction cost) to receive 844,560 shares of the Company's common stock (valued at $0.25 per share). The Company received net proceeds of $439,765. All issuance costs will be amortized as interest expense over the life of the note. This transaction increased the Company's consolidated stockholders' equity by $211,140.
(f) On January 11, 2018 the Company entered into an agreement to extend the maturity its $4.0 million Seller's Note from July 2, 2019 to April 2, 2020. In connection with this modification the Company issued 800,000 restricted common shares.
(g) This proforma balance sheet is presented as if the transactions described above occurred as of September 30, 2018. It does not contemplate any other changes to the accounts of the Company reflected in its consolidated balance sheets or the impact of the Company's results of operations for the period of October 1, 2018 through January 15, 2019.
