Grom Social Enterprises (GROM) 10-Q 14 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 14, 2019
Document And Entity Information
Entity Registrant Name	Grom Social Enterprises, Inc.
Entity Central Index Key	0001662574
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		149,909,803
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Interactive data current	Yes
Entity File Number	000-55585
Entity Incorporation State Country Code	FL

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current Assets:
Cash and cash equivalents	$ 856,052	$ 633,593
Accounts receivable, net	900,522	1,123,493
Inventory, net	28,750	9,018
Prepaid expenses and other current assets	336,422	449,840
Total current assets	2,121,746	2,215,944
Operating lease right of use assets	1,003,529	0
Property and equipment, net	975,248	1,036,313
Goodwill	8,853,261	8,853,261
Intangible assets, net	6,146,713	6,340,171
Deferred tax assets, net - noncuurent	269,192	249,833
Other assets	76,320	114,601
Total assets	19,446,009	18,810,123
Current Liabilities
Accounts payable	792,369	682,285
Accrued liabilities	1,635,335	1,433,037
Advanced payments and deferred revenues	1,272,250	1,120,228
Convertible debentures, net - current	6,760,435	676,223
Senior secured promissory notes, net - current	0	3,828,818
Related party payables	990,796	1,181,645
Income taxes payable	0	41,097
Total current liabilities	11,451,185	8,963,333
Convertible debentures, net of loan discounts	436,608	2,410,614
Lease liabilities	1,014,624	0
Contingent purchase consideration	429,000	429,000
Other noncurrent liabilities	233,167	224,797
Total liabilities	13,564,584	12,027,744
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.001 par value. 25,000,000 shares authorized; 925,000 and zero shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively	925	0
Common stock, $0.001 par value. 200,000,000 shares authorized; 147,268,620 and 138,553,655 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively	147,269	138,554
Additional paid-in capital	54,079,515	52,254,286
Accumulated earnings (deficit)	(48,214,100)	(45,457,207)
Accumulated other comprehensive income	(132,184)	(153,254)
Total stockholders' equity	5,881,425	6,782,379
Total liabilities and equity	$ 19,446,009	$ 18,810,123

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value	$ .001	$ .001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	147,268,620	138,553,655
Common stock, shares outstanding	147,268,620	138,553,665
Preferred stock, par value	$ .001	$ .001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	925,000	0
Preferred stock, shares outstanding	925,000	0

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Sales	$ 2,075,081	$ 1,778,633	$ 4,041,941	$ 3,811,305
Cost of good sold	1,050,372	668,386	1,864,874	1,446,125
Gross margin	1,024,709	1,110,247	2,177,067	2,365,180
Operating expenses:
Depreciation and amortization	226,371	204,986	448,799	405,087
Selling and marketing	32,934	55,442	61,033	111,354
General and administrative	1,224,670	1,575,698	2,744,390	2,944,244
Professional fees	342,893	300,424	633,662	682,979
Stock-based compensation	16,200	92,970	32,400	169,163
Total operating expenses	1,843,068	2,229,520	3,920,284	4,312,827
Income (loss) from operations	(818,359)	(1,119,273)	(1,743,217)	(1,947,647)
Other income (expense)
Interest income (expense), net	(313,622)	(245,366)	(689,782)	(508,459)
Gain (loss) on settlement of debt	0	0	(363,468)	0
Other gains (losses)	18,727	34,161	39,574	34,506
Total Other Income (expense)	(294,895)	(211,205)	(1,013,676)	(473,953)
Income (loss) before income taxes	(1,113,254)	(1,330,478)	(2,756,893)	(2,421,600)
Provision for income taxes (benefit)	0	23,409	0	23,409
Net income (loss)	(1,113,254)	(1,353,887)	(2,756,893)	(2,445,009)
Convertible preferred stock beneficial conversion feature and other discounts accreted as a deemed dividend	(100,694)	0	(740,899)	0
Net loss attributable to common stockholders	$ (1,213,948)	$ (1,353,887)	$ (3,497,792)	$ (2,445,009)
Basic and diluted earnings (loss) per common share	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
Weighted average number of shares outstanding - basic and diluted	144,780,176	126,387,518	142,413,600	126,017,416
Comprehensive loss:
Net income (loss)	$ (1,113,254)	$ (1,353,887)	$ (2,756,893)	$ (2,445,009)
Foreign currency translation adjustment	9,966	(68,882)	21,070	(110,477)
Comprehensive income (loss)	$ (1,103,288)	$ (1,422,769)	$ (2,735,823)	$ (2,555,486)

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Preferred Stock	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total
Beginning balance, shares at Dec. 31, 2017	0	124,273,548
Beginning balance, value at Dec. 31, 2017	$ 0	$ 124,274	$ 47,901,532	$ (40,843,568)	$ (77,344)	$ 7,104,894
Net income (loss)				(1,091,122)		(1,091,122)
Change in foreign currency translation					(41,595)	(41,595)
Issuance of common stock in connection with the exercise of common stock purchase warrants, shares		256,455
Issuance of common stock in connection with the exercise of common stock purchase warrants, value		$ 256	61,244			61,500
Issuance of common stock as compensation to employees, officers and/or directors, shares		115,321
Issuance of common stock as compensation to employees, officers and/or directors, value		$ 115	76,078			76,193
Issuance of common stock in exchange for consulting, professional and other services, shares		197,500
Issuance of common stock in exchange for consulting, professional and other services, value		$ 197	138,178			138,375
Issuance of common stock in lieu of cash for loans payable and other accrued obligations, shares		285,627
Issuance of common stock in lieu of cash for loans payable and other accrued obligations, value		$ 286	171,090			171,376
Issuance of common stock in connection with the issuance of convertible debentures, shares		186,566
Issuance of common stock in connection with the issuance of convertible debentures, value		$ 187	109,652			109,839
Issuance of common stock in connection with the amendment of terms of promissory note(s), shares		800,000
Issuance of common stock in connection with the amendment of terms of promissory note(s), value		$ 800	479,200			480,000
Recognition of beneficial conversion features related to convertible debentures			800			800
Ending balance, shares at Mar. 31, 2018	0	126,115,017
Ending balance, value at Mar. 31, 2018	$ 0	$ 126,115	48,937,774	(41,934,690)	(118,939)	7,010,260
Beginning balance, shares at Dec. 31, 2017	0	124,273,548
Beginning balance, value at Dec. 31, 2017	$ 0	$ 124,274	47,901,532	(40,843,568)	(77,344)	7,104,894
Net income (loss)						(2,445,009)
Change in foreign currency translation						(110,477)
Ending balance, shares at Jun. 30, 2018	0	127,328,822
Ending balance, value at Jun. 30, 2018	$ 0	$ 127,329	49,493,776	(43,288,577)	(187,821)	6,144,707
Beginning balance, shares at Mar. 31, 2018	0	126,115,017
Beginning balance, value at Mar. 31, 2018	$ 0	$ 126,115	48,937,774	(41,934,690)	(118,939)	7,010,260
Net income (loss)				(1,353,887)		(1,353,887)
Change in foreign currency translation					(68,882)	(68,882)
Issuance of common stock as compensation to employees, officers and/or directors, shares		480,000
Issuance of common stock as compensation to employees, officers and/or directors, value		$ 480	215,770			216,250
Issuance of common stock in exchange for consulting, professional and other services, shares		437,000
Issuance of common stock in exchange for consulting, professional and other services, value		$ 438	196,437			196,875
Issuance of common stock in connection with the issuance of convertible debentures, shares		141,805
Issuance of common stock in connection with the issuance of convertible debentures, value		$ 141	88,280			88,421
Issuance of common stock in connection with the amendment of terms of promissory note(s), shares		5,000
Issuance of common stock in connection with the amendment of terms of promissory note(s), value		$ 5	2,245			2,250
Issuance of common stock in connection with the acquisition of a business, shares		150,000
Issuance of common stock in connection with the acquisition of a business, value		$ 150	52,350			52,500
Stock based compensation expense related to stock options			920			920
Ending balance, shares at Jun. 30, 2018	0	127,328,822
Ending balance, value at Jun. 30, 2018	$ 0	$ 127,329	49,493,776	(43,288,577)	(187,821)	6,144,707
Beginning balance, shares at Dec. 31, 2018	0	138,553,655
Beginning balance, value at Dec. 31, 2018	$ 0	$ 138,554	52,254,286	(45,457,207)	(153,254)	6,782,379
Net income (loss)				(1,643,639)		(1,643,639)
Change in foreign currency translation					11,104	11,104
Issuance of Series A preferred stock in connection with sales made under private offerings, shares	800,000
Issuance of Series A preferred stock in connection with sales made under private offerings, value	$ 800		354,795			355,595
Issuance of common stock in connection with sales of Series A preferred stock, shares		4,000,000
Issuance of common stock in connection with sales of Series A preferred stock, value		$ 4,000	440,405			444,405
Issuance of common stock in exchange for consulting, professional and other services, shares		1,377,338
Issuance of common stock in exchange for consulting, professional and other services, value		$ 1,377	348,268			349,645
Issuance of common stock in lieu of cash for loans payable and other accrued obligations, shares		99,720
Issuance of common stock in lieu of cash for loans payable and other accrued obligations, value		$ 100	26,840			26,940
Issuance of common stock in connection with the amendment of terms of promissory note(s), shares		800,000
Issuance of common stock in connection with the amendment of terms of promissory note(s), value		$ 800	219,200			220,000
Beneficial conversion feature related to preferred stock			199,800			199,800
Deemed dividend on conversion of convertible preferred stock to common stock			(199,800)			(199,800)
Accretion of Series A preferred stock			440,405			440,405
Deemed dividend on accretion of Series A preferred stock			(440,405)			(440,405)
Ending balance, shares at Mar. 31, 2019	800,000	144,830,713
Ending balance, value at Mar. 31, 2019	$ 800	$ 144,831	53,643,794	(47,100,846)	(142,150)	6,546,429
Beginning balance, shares at Dec. 31, 2018	0	138,553,655
Beginning balance, value at Dec. 31, 2018	$ 0	$ 138,554	52,254,286	(45,457,207)	(153,254)	6,782,379
Net income (loss)						(2,756,893)
Change in foreign currency translation						21,070
Ending balance, shares at Jun. 30, 2019	925,000	147,268,620
Ending balance, value at Jun. 30, 2019	$ 925	$ 147,269	54,079,515	(48,214,100)	(132,184)	5,881,425
Beginning balance, shares at Mar. 31, 2019	800,000	144,830,713
Beginning balance, value at Mar. 31, 2019	$ 800	$ 144,831	53,643,794	(47,100,846)	(142,150)	6,546,429
Net income (loss)				(1,113,254)		(1,113,254)
Change in foreign currency translation					9,966	9,966
Issuance of Series A preferred stock in connection with sales made under private offerings, shares	125,000
Issuance of Series A preferred stock in connection with sales made under private offerings, value	$ 125		55,431			55,556
Issuance of common stock in connection with sales of Series A preferred stock, shares		625,000
Issuance of common stock in connection with sales of Series A preferred stock, value		$ 625	68,819			69,444
Issuance of common stock in exchange for consulting, professional and other services, shares		499,444
Issuance of common stock in exchange for consulting, professional and other services, value		$ 500	108,852			109,352
Issuance of common stock in connection with the issuance of convertible debentures, shares		80,130
Issuance of common stock in connection with the issuance of convertible debentures, value		$ 80	18,852			18,932
Beneficial conversion feature related to preferred stock			31,250			31,250
Deemed dividend on conversion of convertible preferred stock to common stock			(31,250)			(31,250)
Accretion of Series A preferred stock			69,444			69,444
Deemed dividend on accretion of Series A preferred stock			(69,444)			(69,444)
Issuance of common stock in connection with sales made under private offerings, shares		1,233,333
Issuance of common stock in connection with sales made under private offerings, value		$ 1,233	183,767			185,000
Ending balance, shares at Jun. 30, 2019	925,000	147,268,620
Ending balance, value at Jun. 30, 2019	$ 925	$ 147,269	$ 54,079,515	$ (48,214,100)	$ (132,184)	$ 5,881,425

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities of continuing operations:
Net income (loss)	$ (2,756,893)	$ (2,445,009)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	448,799	405,087
Amortization of debt discount	269,349	325,619
Common stock issued for financing costs	18,932	2,250
Common stock issued in exchange for fees and services	458,998	263,250
Deferred taxes	(19,358)	11,776
Stock-based compensation	32,400	293,363
Loss on extinguishment of debt	363,468	0
Changes in operating assets and liabilities:
Accounts receivable	222,971	(110,778)
Inventory	(19,732)	(95,927)
Prepaid expenses and other current assets	81,018	127,138
Operating lease right of use assets	11,095	0
Other assets	38,281	12,239
Accounts payable	136,923	(143,522)
Accrued liabilities	202,298	59,426
Advanced payments and deferred revenues	152,022	280,659
Income taxes payable and other noncurrent liabilities	(32,727)	(60,857)
Related party payables	(190,850)	217,616
Net cash provided by (used in) operating activities	(583,006)	(857,670)
Cash flows from investing activities:
Purchase of fixed assets	(194,276)	(249,252)
Net cash provided by (used in) investing activities	(194,276)	(249,252)
Cash flows from financing activities:
Proceeds from issuance of preferred stock, net of issuance costs	411,151	0
Proceeds from issuance of common stock, net of issuance costs	698,849	0
Proceeds from exercise of common stock purchase warrants, net of issuance costs	0	61,500
Proceeds from issuance of convertible debentures	0	1,186,135
Repayments of convertible debentures	(131,429)	(75,000)
Net cash provided by (used in) financing activities	978,571	1,172,635
Effect of exchange rates on cash and cash equivalents	21,170	(110,577)
Net increase (decrease) in cash and cash equivalents	222,459	(44,864)
Cash and cash equivalents at beginning of the period	633,593	436,869
Cash and cash equivalents at end of the period	856,052	392,005
Supplemental disclosure of cash flow information:
Cash paid for interest	208,493	70,253
Cash paid for income taxes	0	0
Supplemental disclosure of non-cash investing and financing activities:
Common stock issued related to the acquisition of a business	0	52,500
Common stock issued for financing costs incurred in connection with convertible and promissory notes	0	678,259
Common stock issued in connection with long term service contracts	0	72,000
Common stock issued to reduce convertible and promissory notes payable	0	171,376
Common stock issued to reduce accounts payable and other accrued liabilities	26,940	0
Discount for beneficial conversion features on convertible debentures	$ 0	$ 801

1. Nature of Operations

1. Nature of Operations	6 Months Ended
	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	1. NATURE OF OPERATIONS We operate our business through the following five wholly-owned subsidiaries: · Grom Social, Inc. (“Grom Social”) was incorporated in the State of Florida on March 5, 2012 and operates our social media network designed for children. · TD Holdings Limited (“TD Holdings”), which was acquired in July 2016, was incorporated in Hong Kong on September 15, 2005 and operates through its subsidiary companies, Top Draw Animation Hong Kong Limited (“TDAHK”) and Top Draw Animation, Inc. (“Top Draw” or “TDA”). The group’s principal activities are the production of animated films based in Manila, the Philippines. · Grom Educational Services, Inc. (“GES”), was incorporated in the State of Florida on January 17, 2017, and operates our NetSpective Webfiltering services to schools and libraries. · Grom Nutritional Services, Inc. (“GNS”) was incorporated in the State of Florida on April 19, 2017. We intend to market and distribute four flavors of a nutritional supplement to children through GNS. · Illumination America Lighting, Inc. (“IAL”), was incorporated in the State of Florida on August 21, 2017. IAL operates our LED lighting business that was our principal business prior to the Share Exchange.

2. Summary of Significant Accou

2. Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial statements. On a consolidated basis, the Company has incurred significant operating losses since inception. The Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations and has incurred significant operating losses since inception and has a working capital deficit which raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. Historically, the Company has raised capital through private placements, convertible debentures and officer loans as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities, and short-term loans. The Company will be required to continue to so until its consolidated operations become profitable. However, there can be no assurance that the Company will be successful in raising sufficient capital when needed. Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements at December 31, 2018 and 2017, as presented in the Company’s Annual Report on Form 10-K filed on April 16, 2019 with the SEC. Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with GAAP and are expressed in United States dollars. For the three and six months ended June 30, 2019, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Grom Social, TD Holdings, GES, GNS, and IAL. TD Holdings was acquired on July 1, 2016; and GES was formed in January 2017 to manage the NetSpective assets and business which were acquired on January 1, 2017. GNS, which was formed in April 2017, has not recorded any material activity through the date of this Report. All intercompany accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of accounts receivable and inventories, purchase price allocation of acquired businesses, impairment of long-lived assets and goodwill, valuation of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Revenue Recognition In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) Other Assets and Deferred Costs - Contracts with Customers Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. The Company adopted this ASU in accordance with the modified retrospective method, effective January 1, 2018, for all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606 while prior period amounts continue to be reported in accordance with legacy GAAP. Under the applicable revenue recognition guidance for fiscal years 2017 and prior, these transactions were recognized when the amounts were billed to the customer. As a result of the Company’s transition to ASC 606, the Company recorded a net change in beginning retained earnings of $263,741 on January 1, 2018, due to the cumulative effect of adopting ASC 606. For the six months ended June 30, 2019, the Company recorded a total of $3,707,458 of animation revenue from contracts with customers which include $101,643 in additional revenue as a result of the adoption of ASC 606. Animation Revenue Under ASC 606, the Company’s animation revenues are generated primarily from contracts with customers for preproduction and production services related to the development of animated movies and television series. TDA preproduction activities include producing storyboards, location design, model and props design, background color and color styling. For production, TDA focuses on library creation, digital asset management, background layout scene assembly, posing, animation and after-effects. We provide our services under fixed-price contracts. Under fixed-price contracts, we agree to perform the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated, we will generate more or less profit or could incur a loss. We account for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We evaluate the services promised in each contract at inception to determine whether the contract should be accounted for as having one or more performance obligations. The services in our contracts are distinct from one another as the referring parties typically can direct all, limited, or single portions of the various preproduction and production activities required to create and design an entire episode to us and we, therefore, have a history of developing stand-alone selling prices for all of these distinct components. Accordingly, our contracts are typically accounted for as containing multiple performance obligations. We determine the transaction price for each contract based on the consideration we expect to receive for the distinct services being provided under the contract. We recognize revenue as performance obligations are satisfied and the customer obtains control of the services. In determining when performance obligations are satisfied, we consider factors such as contract terms, payment terms and whether there is an alternative future use of the product or service. Substantially all of our revenue is recognized over time as we perform under the contract due to the contractual terms present in each contract which irrevocably transfer control of the work product to the customer as the services are performed. For performance obligations recognized over time, revenue is recognized based on the extent of progress towards completion of the performance obligation, generally using the percentage-of-completion cost-to-cost measure of progress for our contracts because it best depicts the transfer of control to the customer as we incur costs on our contracts. Under the percentage-of-completion cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs to complete the performance obligation. Webfiltering Revenue Revenue from subscription sales for webfiltering at NetSpective is recognized on a pro-rata basis over the subscription period. Typically, a subscriber purchases computer hardware and a service license for a period of use between one year to five years for software and support. The subscriber is billed in full at the time of the sale. The Company immediately recognizes any revenue attributable to the computer hardware as it is non-refundable, and control of the hardware has passed to the customer. The advanced billing for software and service is initially recorded as deferred revenue and subsequently recognized as revenue over time evenly throughout the subscription period. Adoption of ASC 606 had no impact on NetSpective’s revenues. Substantially all of the revenue at TDA and NetSpective comes from North America in the form of animation and webfiltering services, respectively. Historically and going forward, TDA’s business is concentrated on five to eight key clients, that vary from year to year based upon discrete projects which become available based on the popularity of a particular TV series, or the expected acceptance of new animated series. TDA receives advance payments for a significant portion of the work it performs. NetSpective, as consistent with industry practice receives full payment in advance of providing webfiltering services over a period of one to five years. Revenue recognition under ASC 606 and historically was unrelated to the timing of milestone or advance payments. NetSpective’s business is focused on forty to fifty US-based school districts located in the US. Both TDA and NetSpective earn revenue via services transferred over time to the client. Approximately 10% of NetSpective’s business is recognized at a point in time due to the non-refundable sale of computer hardware associated with web filtering services. Contract Assets and Liabilities Revenues from NetSpective contracts are all billed in advance and therefore represent contract liabilities until fully recognized on a ratable basis over the contract life. Animation revenue contracts vary with movie contracts typically allowing for progress billings over the contract term while other episodic development activities are typically billable upon delivery of the performance obligation for an episode. These episodic activities typically create unbilled contract assets between episode delivery dates while movies can create contract assets or liabilities based on the progress of activities versus the arranged billing schedule. The following table depicts the composition of our contract assets and liabilities as of June 30, 2019, and December 31, 2018: June 30, 2019 December 31, 2018 Animation contract assets $ 812,645 $ 1,040,309 NetSpective contract assets 79,176 74,743 Other contract assets 8,701 8,441 Total contract assets $ 900,522 $ 1,123,493 Animation contract liabilities $ 629,671 $ 380,749 NetSpective contract liabilities 631,079 727,979 Other contract liabilities 11,500 11,500 Total contract liabilities $ 1,272,250 $ 1,120,228 Fair Value Measurements The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2019, and December 31, 2018. The Company uses the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain balance sheet financial instruments approximates its fair value. These financial instruments include cash, trade receivables, related party payables, accounts payable, accrued liabilities and short-term borrowings. Fair values were estimated to approximate carrying values for these financial instruments since they are short term in nature, and they are receivable or payable on demand. The estimated fair value of assets and liabilities acquired in business combinations and reporting units and long-lived assets used in the related asset impairment tests utilize inputs classified as Level 3 in the fair value hierarchy. The Company determines the fair value of contingent consideration based on a probability-weighted discounted cash flow analysis. The fair value remeasurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy. In each period, the Company reassesses its current estimates of performance relative to the stated targets and adjusts the liability to fair value. Any such adjustments are included as a component of Other Income (Expense) in the Consolidated Statements of Operations and Comprehensive Loss. The following table summarizes the change in the Company’s financial assets and liabilities measured at fair value as of June 30, 2019, and December 31, 2018. Level 1 Level 2 Level 3 Earnout liability $ – $ – $ 429,000 Fair value, December 31, 2017 $ 429,000 Change in fair value – Fair value, December 31, 2018 $ 429,000 Change in fair value – Fair value, June 30, 2019 $ 429,000 Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible and other promissory notes are reviewed to determine whether they contain embedded derivative instruments that are required to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Beneficial Conversion Features In accordance with FASB ASC 470-20, “Debt with Conversion and Other Options” the Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt or preferred stock instruments that have conversion features at fixed rates that are in-the-money when issued. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. If certain other securities are issued with the convertible security, the proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the convertible security. Stock Purchase Warrants The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds, the fair value of which approximates cost. The Company maintains its cash balances with a high-credit-quality financial institution. At times, such cash may be more than the Federal Deposit Insurance Corporation-insured limit of $250,000. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents. Accounts Receivable Accounts receivable are customer obligations due under normal trade terms which are recorded at net realizable value. The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Inventory Inventory consists of animation supplies used for the sole purpose of completing animation projects at Top Draw, and saleable computer hardware used by customers to facilitate the Company’s NetSpective webfiltering services. Property and Equipment Property and equipment are stated at cost or fair value if acquired as part of a business combination. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The estimated useful lives of property and equipment are as follows: Computers, software, and office equipment 1 – 5 years Machinery and equipment 3 – 5 years Vehicles 5 years Furniture and fixtures 5 – 10 years Leasehold improvements Lesser of the lease term or estimated useful life Construction in process is not depreciated until the construction is completed and the asset is placed into service. Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist of customer relationships and non-compete agreements. Their estimated useful lives range from 1.5 to 10 years. The Company’s indefinite-lived intangible assets consist of trade names. Goodwill and indefinite-lived assets are not amortized but are subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the Company to perform an impairment test prior to scheduled annual impairment tests. The Company performed its annual fair value assessment at December 31, 2018, on its subsidiaries with material goodwill and intangible asset amounts on their respective balance sheets and determined that no impairment exists. Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability of its long-lived assets on December 31, 2018 on its subsidiaries with material amounts on their respective balance sheets and determined that no impairment exists. Income Taxes The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes” “Accounting for Uncertainty in Income Taxes” The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions on a quarterly basis to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit. Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No. 2016-02, "Leases" (ASC 842). The standard requires lessees to recognize almost all leases on the balance sheet as a right of use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company beginning January 1, 2019. The Company adopted ASC 842 using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840. The Company elected the package of practical expedients permitted under the standard, which also allowed the Company to carry forward historical lease classifications. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities. Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, non-current on the Company's condensed consolidated balance sheets. As a result of the adoption of ASC 842 on January 1, 2019, the Company recorded both operating lease ROU assets of $1,032,898 and operating lease liabilities of $1,032,898. The adoption did not impact the Company's beginning retained earnings, or prior year consolidated statements of income and statements of cash flows. Foreign Currency Translation The functional and reporting currency of TD Holdings and TDAHK is the Hong Kong Dollar. The functional and reporting currency of Top Draw is the Philippine Peso. Management has adopted ASC 830 “Foreign Currency Matters” for transactions that occur in foreign currencies. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurred. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders' equity in the statement of stockholders' equity. Differences may arise in the amount of bad debt expense, depreciation expense and amortization expense reported in the Company's operating results as compared to the corresponding change in the allowance for doubtful accounts, accumulated depreciation, and accumulated amortization, respectively, due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company's stockholders' equity. Comprehensive Gain or Loss ASC 220 “Comprehensive Income,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As of June 30, 2019 and December 31, 2018, the Company determined that it had items that represented components of comprehensive income (loss) and, therefore, has included a statement of comprehensive income (loss) in the financial statements. Advertising expenses Advertising costs are expensed as incurred and included in selling and marketing expenses. Shipping and handling costs Shipping and handling costs related to the acquisition of goods from vendors are included in the cost of sales. Basic and Diluted Net Income (Loss) Per Share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share” Recent accounting pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3. Accounts Receivable, Net

3. Accounts Receivable, Net	6 Months Ended
	Jun. 30, 2019
Receivables [Abstract]
Accounts Receivable	3. ACCOUNTS RECEIVABLE, NET The following table sets forth the components of the Company’s accounts receivable at June 30, 2019, and December 31, 2018: June 30, 2019 December 31, 2018 Billed accounts receivable $ 685,728 $ 419,802 Unbilled accounts receivable 214,794 703,691 Total accounts receivable $ 900,522 $ 1,123,493 As of June 30, 2019, and December 31, 2018, the Company evaluated its outstanding trade receivables and determined that its allowance for bad debts was sufficiently reserved. No bad debt expense was recorded during the six-month period ended June 30, 2019 and the year ended December 31, 2018. During the six-month period ended June 30, 2019, the Company had three customers that accounted for 42.6% of revenues and one customer that accounted for 23.4% of accounts receivable. During the year ended December 31, 2018, the Company had three customers that accounted for 50.1% of revenues and one customer that accounted for 9.2% of accounts receivable.

4. Prepaid Expenses and Other C

4. Prepaid Expenses and Other Current Assets	6 Months Ended
	Jun. 30, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid Expenses and Other Current Assets	4. PREPAID EXPENSES AND OTHER CURRENT ASSETS The following table sets forth the components of the Company’s prepaid expenses and other current assets at June 30, 2019, and December 31, 2018: June 30, 2019 December 31, 2018 Collaborative development agreement $ 47,883 $ 95,766 Prepaid rent 32,956 31,773 Vendor advances 5,659 7,867 Prepaid service agreements 138,767 174,920 Employee advance and other payroll related items 18,937 16,208 Other prepaid expenses and current assets 92,220 123,306 Total $ 336,422 $ 449,840 Prepaid expenses and other assets represent prepayments made in the normal course and in which the economic benefit is expected to be realized within twelve months.

5. Property and Equipment

5. Property and Equipment	6 Months Ended
	Jun. 30, 2019
Property, Plant and Equipment [Abstract]
Property and Equipment	5. PROPERTY AND EQUIPMENT The following table sets forth the components of the Company’s property and equipment at June 30, 2019 and December 31, 2018: June 30, 2019 December 31, 2018 Gross Carrying Amount Accumulated Depreciation Net Book Value Gross Carrying Amount Accumulated Depreciation Net Book Value Capital assets subject to depreciation: Computers, software and office equipment $ 2,079,612 $ (1,713,418 ) $ 366,194 $ 1,937,987 $ (1,508,104 ) $ 429,883 Machinery and equipment 173,976 (114,224 ) 59,752 167,731 (99,900 ) 67,831 Vehicles 157,810 (64,435 ) 93,375 153,927 (120,728 ) 33,199 Furniture and fixtures 395,716 (307,740 ) 87,976 381,248 (284,410 ) 96,838 Leasehold improvements 1,070,101 (702,150 ) 367,951 1,031,687 (623,125 ) 408,562 Total fixed assets $ 3,877,215 $ (2,901,967 ) $ 975,248 $ 3,672,580 $ (2,636,267 ) $ 1,036,313 For the six-month periods ended June 30, 2019 and 2018, the Company recorded depreciation expense of $255,341 and $170,668, respectively.

6. Leases

6. Leases	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Leases	6. LEASES The Company has entered into operating leases primarily for real estate. These leases have terms which range from three years to five years, and often include one or more options to renew or in the case of equipment rental, to purchase the equipment. These operating leases are listed as separate line items on the Company's June 30, 2019 Consolidated Balance Sheet and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as separate line items on the Company's June 30, 2019 Consolidated Balance Sheet. Operating lease ROU assets and liabilities commencing after January 1, 2019 are recognized at commencement date based on the present value of lease payments over the lease term. Based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recognized ROU assets and lease liabilities for operating leases of approximately $1,003,203 in assets and $1,014,331 in liabilities as of June 30, 2019. In the six months ended June 30, 2019, the Company recognized approximately $186,484 in total lease costs. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Information related to the Company's operating right-of-use assets and related lease liabilities were as follows: Six Months Ended Cash paid for operating lease liabilities $ 174,919 Weighted-average remaining lease term (in years) 3.9 Weighted-average discount rate 10% Minimum future lease payments $ 1,259,690 The following table presents the Company’s future minimum lease obligation under ASC 840 as of December 31, 2018: 2019 349,837 2020 352,888 2021 367,636 2022 335,659 2023 28,589

7. Goodwill and Intangible Asse

7. Goodwill and Intangible Assets	6 Months Ended
	Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	7. GOODWILL AND INTANGIBLE ASSETS The following table sets forth the changes in the carrying amount of the Company’s goodwill at June 30, 2019, and December 31, 2018: Balance, December 31, 2017 $ 8,800,761 Acquisition of Bonnie Boat & Friends assets 52,500 Balance, December 31, 2018 $ 8,853,261 Activity for the period ended June 30, 2019 – Balance June 30, 2019 $ 8,853,261 The following table sets forth the components of the Company’s intangible assets at June 30, 2019, and December 31, 2018: June 30, 2019 December 31, 2018 Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Intangible assets subject to amortization: Customer relationships 10.00 $ 1,600,286 (476,386 ) 1,123,900 $ 1,600,286 $ (396,371 ) $ 1,203,915 Mobile software applications 2.00 282,500 (282,500 ) – 282,500 (282,500 ) – NetSpective webfiltering software 2.00 1,134,435 (567,217 ) 567,218 1,134,435 (453,774 ) 680,661 Noncompete agreements 1.50 846,638 (846,638 ) – 846,638 (846,638 ) – Subtotal 3,863,859 (2,172,741 ) 1,691,118 3,863,859 (1,979,283 ) 1,884,576 Intangible assets not subject to amortization: Trade names 4,455,595 – 4,455,595 4,455,595 – 4,455,595 Total intangible assets $ 8,319,454 $ (2,172,741 ) $ 6,146,713 $ 8,319,454 $ (1,979,283 ) $ 6,340,171 The Company recorded amortization expense for intangible assets subject to amortization of $193,458 and $230,239 for the six months ended June 30, 2019 and 2018, respectively.

8. Other Assets

8. Other Assets	6 Months Ended
	Jun. 30, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other Assets	8. OTHER ASSETS Other assets are comprised solely of guarantee deposits at TDA which are refundable upon termination of contract or delivery of subject matter of the contract. These are initially recorded at cost which is the fair value at the time of transaction and are subsequently measured at amortized cost.

9. Accounts Payable and Accrued

9. Accounts Payable and Accrued Liabilities	6 Months Ended
	Jun. 30, 2019
Payables and Accruals [Abstract]
Accounts Payable and Accrued Liabilities	9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Trade payables are recognized initially at the transaction price and subsequently measured at the undiscounted amount of cash or other consideration expected to be paid. Accrued expenses are recognized based on the expected amount required to settle the obligation or liability. The following table sets forth the components of the Company’s accrued liabilities on June 30, 2019, and December 31, 2018. June 30, 2019 December 31, 2018 Earnout consideration payable in connection with NetSpective acquisition $ 362,500 $ 362,500 Executive and employee compensation 909,063 792,402 Interest on convertible debentures and promissory notes 301,784 210,221 Other accrued expenses and liabilities 61,988 67,914 Total accrued liabilities $ 1,635,335 $ 1,433,037 Accrued expenses for both include approximately $138,000 for an estimated compromise settlement relating to tax deductions against supplier invoices in the Philippines at TDA. The Company in accordance with ASC 740-10 has determined that the recording of this amount is required because it is more likely than not that the tax will be assessed.

10. Related Party Payables

10. Related Party Payables	6 Months Ended
	Jun. 30, 2019
Related Party Transactions [Abstract]
Related Party Payables	10. RELATED PARTY PAYABLES The Company has engaged the Chief Executive Officer, Darren Mark’s family to assist in the development of the Grom Social website and to create original content for the site. Since these individuals have been responsible for creating in excess of 500 episodes of original content. Mr. Marks wife Sarah; his sons Zach the founder of Grom, Luke, Jack, Dawson, and his daughters Caroline and Victoria all work for the Company either as employees or contractors. · The amount they were paid for the year ended December 31, 2018 are as follows: Sarah $33,600, Zach $90,000, Luke $33,800, Jack $5,400, Victoria $6,750 and Caroline $11,250. The total annual compensation payable to these six individuals for the period ended December 31, 2018, was $180,800. · For the six-month period ended June 30, 2019, these individuals were paid a total of $78,450. The Company believes the amounts paid to these individuals is below market rate for the value of the services performed. This expenditure for services provided by the Marks family is expected to continue for the foreseeable future. Members of the Marks family are actively involved on a daily basis in creating all of the current content for the website which includes numerous videos on social responsibility, anti-bullying, digital citizenship, unique blogs, and special events. Liabilities Due to Executive and Other Officers Messrs. Darren Marks and Melvin Leiner, both officers of the Company, have made numerous loans to Grom to help fund operations. These loans are non-interest bearing and callable on demand. No such loans have been made to the Company since the year ended December 31, 2017. The loan balances are classified as short-term obligations under Related Party Payables on the Company’s balance sheet. During 2017 and 2018 Mr. Marks and Mr. Leiner on several occasions agreed to convert a portion of their loans into equity. These transactions are summarized as follows: Name Date Amount of Loan Principal Converted to Equity Conversion Price per Share Closing Price of Common Stock on Conversion Date Shares of Common Stock Issued Darren Marks 12/29/2017 333,333 $ 0.50 0.30 666,666 10/15/2018 333,333 $ 0.31 0.19 1,075,268 Melvin Leiner 12/29/2017 166,667 $ 0.50 0.30 333,334 10/15/2018 166,667 $ 0.31 0.19 537,635 As of June 30, 2019 and December 31, 2018, the outstanding amounts due to Mr. Marks totaled $415,501 and $469,506, respectively, and the outstanding amounts due to Mr. Leiner totaled $416,722 and $451,944, respectively. As of June 30, 2019 and December 31, 2018, the Company owed $50,000 to Dr. Thomas Rutherford, a director on its board, who extended a short-term loan to the Company. Additionally, as of June 30, 2019 and December 31, 2018, the Company owed $108,573 and $210,145, respectively, to Wayne and Stella Dearing, collectively, who extended loans to Top Draw Animation. These loans were made to the Company to finance working capital needs. As of June 30, 2019 and December 31, 2018, the aggregate balance of related party payables was $990,796 and $1,181,645 respectively.

11. Other Noncurrent Liabilitie

11. Other Noncurrent Liabilities	6 Months Ended
	Jun. 30, 2019
Other Liabilities Disclosure [Abstract]
Other Noncurrent Liabilities	11. OTHER NONCURRENT LIABILITIES Other noncurrent liabilities are comprised solely of retirement benefit costs. The Philippine Republic Act (RA) No. 7641, mandates all private employers to provide retirement benefits to employees who upon reaching the age of sixty years or more, but not beyond sixty-five years, have served at least five years in the said establishment. The amount of retirement benefit was defined as “at least one-half month salary for every year of service, a fraction of at least six months being considered as one whole year”. The balance of the accrued retirement benefit cost as of June 30, 2019 and December 31, 2018 amounted to $233,167 and $224,797 respectively.

12. Debt

12. Debt	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Debt	12. DEBT Convertible Debentures The following tables set forth the components of the Company’s, convertible debentures as of June 30, 2019, and December 31, 2018: June 30, December 31, Redeemable unsecured convertible note - TeleMate $ 1,000,000 1,000,000 Principal value of secured convertible notes 6,691,278 2,822,708 Loan discounts (494,235 ) (735,871 ) Less: Current portion (6,760,435 ) (676,223 ) Total convertible notes, net - noncurent $ 436,608 $ 2,410,614 The Company did not issue any convertible notes or debt instruments during the six-month period ended June 30, 2019. First Amendment of TDH Share Sale Agreement On January 3, 2018, we entered into an amendment (the “First Amendment”) to the TDH share sale agreement with the individuals that sold TDH to the Company (“TDH Sellers”). Under the terms of the First Amendment: · the maturity date of the $4.0 million promissory note issued to the TDH Sellers by the Company on June 20, 2016 as part of the acquisition of TDH by the Company (the “TDH Note”), was extended from July 1, 2018 until July 1, 2019 (the “Note Extension Period”); · the interest rate on the TDH Note was increased from 5% to 10% during the Note Extension Period; · during the Note Extension Period, the interest payments terms were changed to be paid quarterly in arrears, instead of annually in arrears; and · the period eligible for additional consideration to be earned by the TDH Sellers contingent upon the achievement of certain milestones, as defined in the TDH share sale agreement, was extended to December 31, 2019. As consideration for the First Amendment, the Company issued an additional 800,000 shares of its common stock to the TDH Sellers. Second Amendment of the TDH Share Sale Agreement On January 15, 2019, we entered into a second amendment to the TDH share sale agreement (the “Second Amendment”). Under the terms of the Second Amendment: · the maturity date of the TDH Note was extended from July 1, 2019, to April 2, 2020. · in the event the TDH Note is not repaid prior to July 2, 2019: (i) no management fee shall be paid by TDA to the Company as provided in the share sale agreement in which the Company acquired TDH. · the TDH Sellers shall have the right to convert the TDH Note at a conversion price of $0.27 per share, either in whole or in part at any time prior to the maturity, subject to the terms and conditions set forth in the Second Amendment As a result of the inclusion of a $0.27 conversion feature, under the guidelines of ASC 470-20-40-7 through 40-9, this element of the Second Amendment was considered an extinguishment and subsequent reissuance of the TDH Note as a convertible promissory note. As a result, the Company recorded a loss from the extinguishment of debt of $363,468 related to the Second Amendment for the six months ended June 30, 2019. Redeemable Unsecured Convertible Note - TeleMate On January 1, 2017, the Company issued a three-year 0.68% redeemable convertible note for $1,000,000 (the “Telemate Note”) to Telemate.Net Software LLC (“Telemate”) in connection with the acquisition of the NetSpective Webfiltering assets. All Telemate Note principal and accrued interest is payable January 1, 2020. The Telemate Note is convertible at the election of the noteholders into the Company’s’ common stock at a conversion rate of $0.78 per share. Furthermore, if not previously converted by the noteholders, the Telemate Note may be converted by the Company into shares of the Company’s common stock at a rate of $0.48 per share commencing on November 1, 2019. Under the terms of the asset purchase agreement, dated January 1, 2017, between Telemate and the Company, in which TeleMate had the obligation to collect certain monies on behalf of the Company, TeleMate failed to remit $146,882 it had collected on the Company’s behalf from NetSpective customers. As a result of TeleMate’s non-payment, and to avoid litigation, on January 12, 2018, we entered into a First Modification to the asset purchase agreement (the “Modification”). Under the terms of the Modification, TeleMate agreed: · to pay the Company $10,000 per month against their outstanding balance of $146,822; · not to exercise the conversion feature of its $1.0 million promissory note, nor will any of the $362,500 earnout shares (464,744) be issued until all payments are made in full; · to extend the December 31, 2019 maturity date of the Telemate Note indefinitely until all payments are made in full; and · that all interest payments ($6,800 annually) due from the Company to TeleMate under the Telemate Note be suspended indefinitely until all payments are made in full. Telemate completed repaying its obligation to the Company in full in April 2019. In the event that TeleMate converts the Telemate Note, the number of shares converted thereunder will be subject to a one-year leakout agreement. In the event that TeleMate does not convert the Telemate Note by October 1, 2019, the Company has the right to force conversion at a conversion price of $0.48 per share. Newbridge Offering On November 30, 2018, the Company closed a private offering in which it sold 12% secured convertible promissory notes in an aggregate principal amount of $552,000 and issued an aggregate of 730,974 shares of its common stock to nine accredited investors pursuant to a private placement memorandum and subscription agreement. The Notes which are due and payable two years from issuance are secured by certain assets of the Company and rank senior to all other indebtedness of the Company except for the $4,000,000 promissory notes (the “TD Notes”) issued to TD Holdings in connection with the Share Sale Agreement, dated June 30, 2016, as amended. Messrs. Marks and Leiner also pledged an aggregate of 10,000,000 shares pursuant to a pledge and security agreement to secure the timely payment of the Notes. The Notes are convertible, in whole or in part, by the note holder at a conversion rate of $0.40 if the Company’s common stock trades or is quoted at more than $0.40 per share for 10 consecutive days. The conversion price is subject to an adjustment resulting from certain corporate actions including the subdivision or combination of stock, payment of dividends, reorganization, reclassification, consolidations, merger or sale of the Company. Interest on the Note is payable monthly in 21 equal installments commencing four months after the issuance of the Notes. Upon the occurrence of an “event of default” as described in the Notes, the interest rate will increase to 15% and the Notes shall become immediately due and payable. The Company may prepay the Notes in full at any time by paying accrued interest and 110% of the outstanding principal balance. Newbridge Securities Corporation acted as exclusive placement agent for the offering and received (i) $55,200, (ii) 113,586 shares of common stock; and (iii) $11,040, representing a non-accountable expense allowance, for its services. Secured Convertible Notes 2018 During the year ended December 31, 2018, the Company issued to accredited investors in private offerings two-year secured, convertible, original issue discount (“OID”) notes for aggregate gross proceeds of $1,238,485. The notes were issued with OID discounts of 20%, or $247,697, have an interest rate of 10% per annum, are payable semiannually in cash, and are convertible into shares of common stock at a fixed conversion price of $0.50 per share if converted within one year of issuance and $0.78 per share thereafter. During the year ended December 31, 2017, the Company privately placed a series of secured, convertible, original issue discount (OID) notes with accredited investors for gross proceeds of $601,223. The Notes were issued with OID discounts of 10.0%, or $60,122. The notes carried an interest rate of 10% per annum, payable semiannually in cash, for a two-year term with a fixed conversion price of $0.78. In connection with the issuance of the above convertible notes, the Company also issued an aggregate of 150,305 shares of common stock as an inducement to lend. These shares were valued at $78,321 with share prices ranging between $0.38 and $0.54 per share. The Company recorded the value of these shares as a loan discount to be amortized as interest expense over the term of the related convertible notes. Maturities of the Company’s borrowings for each of the next two years are as follows: 2019 $ 676,223 2020 $ 7,015,055

13. Stockholders' Equity

13. Stockholders' Equity	6 Months Ended
	Jun. 30, 2019
Equity [Abstract]
Stockholders' Equity	13. STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 25,000,000 shares of preferred stock at a par value of $0.001. On February 22, 2019, the Company designated 2,000,000 shares of its preferred stock as 10% Series A Convertible preferred stock, par value $0.001 per share (“Series A Stock”). The Series A Stock is convertible, at any time, into five shares of common stock of the Company. On each of February 27, 2019 and March 11, 2019, the Company received $400,000 from the sale of 400,000 shares of Series A Stock to accredited investors in private offerings pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D, as promulgated under the Securities Act of 1933, as amended (the “Securities Act”). As an inducement to purchase the Series A Stock, each investor also received 2,000,000 restricted shares of the Company’s common stock. On April 2, 2019, the Company received $125,000 from the sale of 125,000 shares of Series A Stock to an accredited investor in a private offering pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D, as promulgated under the Securities Act. As an inducement to purchase the Series A Stock, the investor also received 625,000 restricted shares of the Company’s common stock. As a result of the issuance of the Series A Stock, we recorded a beneficial conversion feature and other discounts as a deemed dividend on our income statement of $740,899. As of June 30, 2019, an aggregate 925,000 shares of Series A Stock were issued and outstanding. No shares of preferred stock were issued and outstanding as of December 31, 2018. Common stock The Company is authorized to issue 200,000,000 shares of common stock at a par value of $0.001 and had 147,268,620 and 138,553,655 shares of common stock issued and outstanding as of June 30, 2019, and December 31, 2018, respectively. Common Stock Issued in Private Placements During the six-month period ended June 30, 2019, the Company issued 1,233,333 shares of common stock and warrants to purchase 1,233,333 shares of common stock at an exercise price of $0.30 in private placements for proceeds of $185,000. During the six months ended June 30, 2019, no common stock was issued in connection with sales made under private placements. Common Stock Issued in Connection with the Exercise of Warrants During the six months ended June 30, 2019, no common stock purchase warrants were exercised. During the six months ended June 30, 2018, the Company issued 256,455 shares of common stock for proceeds of $61,244 under a series of stock warrant exercises with an exercise price of $0.24 per share. Common Stock Issued in Exchange for Consulting, Professional and Other Services During the six months ended June 30, 2019, the Company did not issue any of its shares of common stock to employees, officers, and directors. The Company issued 1,876,782 shares of common stock with a fair value of $458,997 to consultants and other professionals in lieu of cash payments for services provided to the Company. During the six months ended June 30, 2018, the Company issued 595,321 shares of common stock with a fair market value of $292,443 to employees, officers and directors in lieu of cash payments. Additionally, the Company issued 634,500 shares of common stock with a fair value of $335,250 to consultants and other professionals in lieu of cash payments for services provided to the Company. Each share issuance made in exchange for services was valued based upon the trading price of the Company’s common stock on the OTC markets on the date the services were performed. Common Stock Issued in lieu of Cash for Loans Payable and Other Accrued Obligations During the six months ended June 30, 2019, the Company issued 99,720 shares of common stock with a fair market value of $26,940 to satisfy loans payable and other accrued obligations. During the six months ended June 30, 2018, the Company issued 285,627 shares of common stock with a fair market value of $171,376 to satisfy loans payable and other accrued obligations. Common Stock Issued in Connection with the Issuance of Convertible Debentures During the six months ended June 30, 2019, the Company issued 80,130 shares of common stock as a result of certain penalties incurred in connection with certain unsecured, convertible note agreements. The fair value of the shares aggregated $18,932 and was recorded as interest expense in the Company’s consolidated financial statements. During the six months ended June 30, 2018, the Company issued 328,371 shares of common stock with a fair market value of $198,260 to investors as an inducement to lend in connection with the issuance of its unsecured, convertible notes. The fair value of the shares was recorded as interest expense in the Company’s consolidated financial statements. Common Stock Issued in the Acquisition of a Business During the six months ended June 30, 2018, the Company issued 150,000 shares valued at $52,000 in connection with the acquisition of the assets of Bonnie Boat & Friends. Common Stock Issued in Connection with the Amendments of the Terms of a Promissory Note During each of the six months ended June 30, 2019 and June 30, 2018, we issued 800,000 shares valued at $480,000 and $220,000 respectively, in connection with the amendment to the $4.0 million TDA Sellers Note. See Note 12 – Debt for more information. Stock Purchase Warrants The stock purchase warrants have been accounted for as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and potentially settled in, a company’s own stock, distinguishing liabilities from equity. The following table reflects all outstanding and exercisable warrants at June 30, 2019, and December 31, 2018. All stock warrants are exercisable for a period between three and five years from the date of issuance. Number of Warrants Outstanding Weighted Avg. Exercise Price Weighted Avg. Contractual Life (Yrs.) Balance January 1, 2017 7,608,154 $ 0.26 0.75 Warrants issued 567,166 $ 1.50 2.00 Less: Warrants exercised (7,107,765 ) $ 0.24 Warrants forfeited (29,190 ) $ 0.24 December 31, 2017 1,038,365 $ 1.36 2.38 Warrants issued – – Warrants exercised (256,455 ) – Balance 31, 2018 781,910 $ 1.36 1.38 Warrants issued 1,233,333 0.30 3.00 Warrants forfeited – – Warrants exercised – – Balance June 30, 2019 2,015,243 $ 0.71 1.21 Stock Options The following table represents all outstanding and exercisable stock options as of June 30, 2019. Options Issued Options Forfeited Options Outstanding Vested Options Exercise Price Weighted Average Remaining Life in Years 10,862,850 3,961,500 6,901,350 6,901,350 $ 0.24 4.22 9,695,250 9,695,250 – – $ 0.36 – 938,250 938,250 – – $ 0.48 – 13,135,500 – 13,135,500 13,135,500 $ 0.72 0.66 5,481,000 – 5,481,000 5,481,000 $ 0.78 2.00 Total 40,112,850 14,595,000 25,517,850 25,517,850 $ 0.60 2.59 The Company did not issue any stock options during the six months ended June 30, 2019 or for the six months ended June 30, 2018. For the six months ended June 30, 2019 and 2018, the Company recorded no expense and $920, respectively in stock-based compensation expense related to these stock options.

14. Commitments and Contingenci

14. Commitments and Contingencies	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	14. COMMITMENTS AND CONTINGENCIES In the United States, we lease approximately 1550 square feet of office space in Boca Raton, Florida for $4,227 per month pursuant to a three-year lease expiring on September 30, 2021. Our Florida office houses our corporate headquarters and administrative staff. Our animation business leases portions of three floors comprising in the aggregate of approximately 28,800 square feet in the West Tower of the Philippine Stock Exchange Centre in Pasig City, Manila for administration and production purposes. We pay approximately $22,533 in rent per month for the aggregate space (which increases by approximately 5% annually). These leases expire in December 2022. We opened a 1,400 square foot office in Norcross, Georgia on January 1, 2018, to operate our NetSpective division. The monthly rent for 2018 was $2,055 which increases by approximately 3% annually, pursuant to a five-year lease which expires in December 2023. We believe our leased space for the present time is adequate and additional space at comparable prices is available at all locations.

15. Subsequent Events

15. Subsequent Events	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	15. SUBSEQUENT EVENTS In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to June 30, 2019 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except as follows: On May 1, 2019, the Company filed a consent solicitation on Schedule 14A with the SEC to obtain the approval of the majority of stockholders entitled to vote on an amendment to the Company’s Articles of Incorporation to increase the authorized common stock of the Company from 200,000,000 shares to 500,000,000 shares. The Company’s Board of Directors fixed April 5, 2019, as the record date for holders of its common stock and Series A preferred stock who will be entitled to participate in the consent solicitation. A Notice of Consent Solicitation was mailed on May 1, 2019 to all holders of its common stock and Series A preferred stock as of the record date. On June 12, 2019, the Company filed Articles of Amendment to its Articles of Incorporation with the Secretary of State of Florida to increase the Company’s authorized shares of common stock from 200,000,000 shares to 500,000,000 shares, which amendment was approved by the Company’s board of directors on April 4, 2019 and its shareholders by consent solicitation on May 31, 2019.

2. Summary of Significant Acc_2

2. Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Going Concern	Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial statements. On a consolidated basis, the Company has incurred significant operating losses since inception. The Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations and has incurred significant operating losses since inception and has a working capital deficit which raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. Historically, the Company has raised capital through private placements, convertible debentures and officer loans as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities, and short-term loans. The Company will be required to continue to so until its consolidated operations become profitable. However, there can be no assurance that the Company will be successful in raising sufficient capital when needed.
Management's Representation of Interim Financial Statements	Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements at December 31, 2018 and 2017, as presented in the Company’s Annual Report on Form 10-K filed on April 16, 2019 with the SEC.
Basis of Presentation	Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with GAAP and are expressed in United States dollars. For the three and six months ended June 30, 2019, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Grom Social, TD Holdings, GES, GNS, and IAL. TD Holdings was acquired on July 1, 2016; and GES was formed in January 2017 to manage the NetSpective assets and business which were acquired on January 1, 2017. GNS, which was formed in April 2017, has not recorded any material activity through the date of this Report. All intercompany accounts and transactions are eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of accounts receivable and inventories, purchase price allocation of acquired businesses, impairment of long-lived assets and goodwill, valuation of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
Revenue Recognition	Revenue Recognition In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) Other Assets and Deferred Costs - Contracts with Customers Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. The Company adopted this ASU in accordance with the modified retrospective method, effective January 1, 2018, for all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606 while prior period amounts continue to be reported in accordance with legacy GAAP. Under the applicable revenue recognition guidance for fiscal years 2017 and prior, these transactions were recognized when the amounts were billed to the customer. As a result of the Company’s transition to ASC 606, the Company recorded a net change in beginning retained earnings of $263,741 on January 1, 2018, due to the cumulative effect of adopting ASC 606. For the six months ended June 30, 2019, the Company recorded a total of $3,707,458 of animation revenue from contracts with customers which include $101,643 in additional revenue as a result of the adoption of ASC 606. Animation Revenue Under ASC 606, the Company’s animation revenues are generated primarily from contracts with customers for preproduction and production services related to the development of animated movies and television series. TDA preproduction activities include producing storyboards, location design, model and props design, background color and color styling. For production, TDA focuses on library creation, digital asset management, background layout scene assembly, posing, animation and after-effects. We provide our services under fixed-price contracts. Under fixed-price contracts, we agree to perform the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated, we will generate more or less profit or could incur a loss. We account for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We evaluate the services promised in each contract at inception to determine whether the contract should be accounted for as having one or more performance obligations. The services in our contracts are distinct from one another as the referring parties typically can direct all, limited, or single portions of the various preproduction and production activities required to create and design an entire episode to us and we, therefore, have a history of developing stand-alone selling prices for all of these distinct components. Accordingly, our contracts are typically accounted for as containing multiple performance obligations. We determine the transaction price for each contract based on the consideration we expect to receive for the distinct services being provided under the contract. We recognize revenue as performance obligations are satisfied and the customer obtains control of the services. In determining when performance obligations are satisfied, we consider factors such as contract terms, payment terms and whether there is an alternative future use of the product or service. Substantially all of our revenue is recognized over time as we perform under the contract due to the contractual terms present in each contract which irrevocably transfer control of the work product to the customer as the services are performed. For performance obligations recognized over time, revenue is recognized based on the extent of progress towards completion of the performance obligation, generally using the percentage-of-completion cost-to-cost measure of progress for our contracts because it best depicts the transfer of control to the customer as we incur costs on our contracts. Under the percentage-of-completion cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs to complete the performance obligation. Webfiltering Revenue Revenue from subscription sales for webfiltering at NetSpective is recognized on a pro-rata basis over the subscription period. Typically, a subscriber purchases computer hardware and a service license for a period of use between one year to five years for software and support. The subscriber is billed in full at the time of the sale. The Company immediately recognizes any revenue attributable to the computer hardware as it is non-refundable, and control of the hardware has passed to the customer. The advanced billing for software and service is initially recorded as deferred revenue and subsequently recognized as revenue over time evenly throughout the subscription period. Adoption of ASC 606 had no impact on NetSpective’s revenues. Substantially all of the revenue at TDA and NetSpective comes from North America in the form of animation and webfiltering services, respectively. Historically and going forward, TDA’s business is concentrated on five to eight key clients, that vary from year to year based upon discrete projects which become available based on the popularity of a particular TV series, or the expected acceptance of new animated series. TDA receives advance payments for a significant portion of the work it performs. NetSpective, as consistent with industry practice receives full payment in advance of providing webfiltering services over a period of one to five years. Revenue recognition under ASC 606 and historically was unrelated to the timing of milestone or advance payments. NetSpective’s business is focused on forty to fifty US-based school districts located in the US. Both TDA and NetSpective earn revenue via services transferred over time to the client. Approximately 10% of NetSpective’s business is recognized at a point in time due to the non-refundable sale of computer hardware associated with web filtering services.
Contract Assets and Liabilities	Contract Assets and Liabilities Revenues from NetSpective contracts are all billed in advance and therefore represent contract liabilities until fully recognized on a ratable basis over the contract life. Animation revenue contracts vary with movie contracts typically allowing for progress billings over the contract term while other episodic development activities are typically billable upon delivery of the performance obligation for an episode. These episodic activities typically create unbilled contract assets between episode delivery dates while movies can create contract assets or liabilities based on the progress of activities versus the arranged billing schedule. The following table depicts the composition of our contract assets and liabilities as of June 30, 2019, and December 31, 2018: June 30, 2019 December 31, 2018 Animation contract assets $ 812,645 $ 1,040,309 NetSpective contract assets 79,176 74,743 Other contract assets 8,701 8,441 Total contract assets $ 900,522 $ 1,123,493 Animation contract liabilities $ 629,671 $ 380,749 NetSpective contract liabilities 631,079 727,979 Other contract liabilities 11,500 11,500 Total contract liabilities $ 1,272,250 $ 1,120,228
Fair Value Measurements	Fair Value Measurements The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2019, and December 31, 2018. The Company uses the market approach to measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The respective carrying value of certain balance sheet financial instruments approximates its fair value. These financial instruments include cash, trade receivables, related party payables, accounts payable, accrued liabilities and short-term borrowings. Fair values were estimated to approximate carrying values for these financial instruments since they are short term in nature, and they are receivable or payable on demand. The estimated fair value of assets and liabilities acquired in business combinations and reporting units and long-lived assets used in the related asset impairment tests utilize inputs classified as Level 3 in the fair value hierarchy. The Company determines the fair value of contingent consideration based on a probability-weighted discounted cash flow analysis. The fair value remeasurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy. In each period, the Company reassesses its current estimates of performance relative to the stated targets and adjusts the liability to fair value. Any such adjustments are included as a component of Other Income (Expense) in the Consolidated Statements of Operations and Comprehensive Loss. The following table summarizes the change in the Company’s financial assets and liabilities measured at fair value as of June 30, 2019, and December 31, 2018. Level 1 Level 2 Level 3 Earnout liability $ – $ – $ 429,000 Fair value, December 31, 2017 $ 429,000 Change in fair value – Fair value, December 31, 2018 $ 429,000 Change in fair value – Fair value, June 30, 2019 $ 429,000
Derivative Financial Instruments	Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible and other promissory notes are reviewed to determine whether they contain embedded derivative instruments that are required to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results.
Beneficial Conversion Features	Beneficial Conversion Features In accordance with FASB ASC 470-20, “Debt with Conversion and Other Options” the Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt or preferred stock instruments that have conversion features at fixed rates that are in-the-money when issued. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. If certain other securities are issued with the convertible security, the proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the convertible security.
Stock Purchase Warrants	Stock Purchase Warrants The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity.
Cash and cash equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds, the fair value of which approximates cost. The Company maintains its cash balances with a high-credit-quality financial institution. At times, such cash may be more than the Federal Deposit Insurance Corporation-insured limit of $250,000. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents.
Accounts receivable	Accounts Receivable Accounts receivable are customer obligations due under normal trade terms which are recorded at net realizable value. The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required. Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.
Inventory	Inventory Inventory consists of animation supplies used for the sole purpose of completing animation projects at Top Draw, and saleable computer hardware used by customers to facilitate the Company’s NetSpective webfiltering services.
Property and equipment	Property and Equipment Property and equipment are stated at cost or fair value if acquired as part of a business combination. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The estimated useful lives of property and equipment are as follows: Computers, software, and office equipment 1 – 5 years Machinery and equipment 3 – 5 years Vehicles 5 years Furniture and fixtures 5 – 10 years Leasehold improvements Lesser of the lease term or estimated useful life Construction in process is not depreciated until the construction is completed and the asset is placed into service.
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist of customer relationships and non-compete agreements. Their estimated useful lives range from 1.5 to 10 years. The Company’s indefinite-lived intangible assets consist of trade names. Goodwill and indefinite-lived assets are not amortized but are subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal to the excess. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the Company to perform an impairment test prior to scheduled annual impairment tests. The Company performed its annual fair value assessment at December 31, 2018, on its subsidiaries with material goodwill and intangible asset amounts on their respective balance sheets and determined that no impairment exists.
Long-Lived Assets	Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability of its long-lived assets on December 31, 2018 on its subsidiaries with material amounts on their respective balance sheets and determined that no impairment exists.
Income taxes	Income Taxes The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes” “Accounting for Uncertainty in Income Taxes” The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions on a quarterly basis to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
RIght of use assets and lease liabilities	Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No. 2016-02, "Leases" (ASC 842). The standard requires lessees to recognize almost all leases on the balance sheet as a right of use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company beginning January 1, 2019. The Company adopted ASC 842 using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under ASC 840. The Company elected the package of practical expedients permitted under the standard, which also allowed the Company to carry forward historical lease classifications. The Company also elected the practical expedient related to treating lease and non-lease components as a single lease component for all equipment leases as well as electing a policy exclusion permitting leases with an original lease term of less than one year to be excluded from the ROU assets and lease liabilities. Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, non-current on the Company's condensed consolidated balance sheets. As a result of the adoption of ASC 842 on January 1, 2019, the Company recorded both operating lease ROU assets of $1,032,898 and operating lease liabilities of $1,032,898. The adoption did not impact the Company's beginning retained earnings, or prior year consolidated statements of income and statements of cash flows.
Foreign Currency Translation	Foreign Currency Translation The functional and reporting currency of TD Holdings and TDAHK is the Hong Kong Dollar. The functional and reporting currency of Top Draw is the Philippine Peso. Management has adopted ASC 830 “Foreign Currency Matters” for transactions that occur in foreign currencies. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurred. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders' equity in the statement of stockholders' equity. Differences may arise in the amount of bad debt expense, depreciation expense and amortization expense reported in the Company's operating results as compared to the corresponding change in the allowance for doubtful accounts, accumulated depreciation, and accumulated amortization, respectively, due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company's stockholders' equity.
Comprehensive Gain or Loss	Comprehensive Gain or Loss ASC 220 “Comprehensive Income,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As of June 30, 2019 and December 31, 2018, the Company determined that it had items that represented components of comprehensive income (loss) and, therefore, has included a statement of comprehensive income (loss) in the financial statements.
Advertising expenses	Advertising expenses Advertising costs are expensed as incurred and included in selling and marketing expenses.
Shipping and handling costs	Shipping and handling costs Shipping and handling costs related to the acquisition of goods from vendors are included in the cost of sales.
Basic and Diluted Net Income (Loss) Per Share	Basic and Diluted Net Income (Loss) Per Share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”
Recent accounting pronouncements	Recent accounting pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

2. Summary of Significant Acc_3

2. Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Schedule of contract assets and liabilities	June 30, 2019 December 31, 2018 Animation contract assets $ 1,203,623 $ 1,040,309 NetSpective contract assets 79,176 74,743 Other contract assets 8,701 8,441 Total contract assets $ 1,291,500 $ 1,123,493 Animation contract liabilities $ 641,853 $ 380,749 NetSpective contract liabilities 631,079 727,979 Other contract liabilities 11,500 11,500 Total contract liabilities $ 1,284,432 $ 1,120,228
Schedule of financial assets and liabilities on a recurring basis	Level 1 Level 2 Level 3 Earnout liability $ – $ – $ 429,000 Fair value, December 31, 2017 $ 429,000 Change in fair value – Fair value, December 31, 2018 $ 429,000 Change in fair value – Fair value, June 30, 2019 $ 429,000
Property and equipment useful lives	Computers, software, and office equipment 1 – 5 years Machinery and equipment 3 – 5 years Vehicles 5 years Furniture and fixtures 5 – 10 years Leasehold improvements Lesser of the lease term or estimated useful life

3. Accounts Receivable, Net (Ta

3. Accounts Receivable, Net (Tables)	6 Months Ended
	Jun. 30, 2019
Receivables [Abstract]
Schedule of accounts receivable	June 30, 2019 December 31, 2018 Billed accounts receivable $ 685,728 $ 419,802 Unbilled accounts receivable 214,794 703,691 Total accounts receivable $ 900,522 $ 1,123,493

4. Prepaid Expenses and Other_2

4. Prepaid Expenses and Other Current Assets (Tables)	6 Months Ended
	Jun. 30, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of prepaid expenses and other current assets	June 30, 2019 December 31, 2018 Collaborative development agreement $ 47,883 $ 95,766 Prepaid rent 32,956 31,773 Vendor advances 5,659 7,867 Prepaid service agreements 138,767 174,920 Employee advance and other payroll related items 18,937 16,208 Other prepaid expenses and current assets 92,220 123,306 Total $ 336,422 $ 449,840

5. Property and Equipment (Tabl

5. Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2019
Property, Plant and Equipment [Abstract]
Property and equipment	June 30, 2019 December 31, 2018 Gross Carrying Amount Accumulated Depreciation Net Book Value Gross Carrying Amount Accumulated Depreciation Net Book Value Capital assets subject to depreciation: Computers, software and office equipment $ 2,079,612 $ (1,713,418 ) $ 366,194 $ 1,937,987 $ (1,508,104 ) $ 429,883 Machinery and equipment 173,976 (114,224 ) 59,752 167,731 (99,900 ) 67,831 Vehicles 157,810 (64,435 ) 93,375 153,927 (120,728 ) 33,199 Furniture and fixtures 395,716 (307,740 ) 87,976 381,248 (284,410 ) 96,838 Leasehold improvements 1,070,101 (702,150 ) 367,951 1,031,687 (623,125 ) 408,562 Total fixed assets $ 3,877,215 $ (2,901,967 ) $ 975,248 $ 3,672,580 $ (2,636,267 ) $ 1,036,313

6. Leases (Tables)

6. Leases (Tables)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Schedule of operating lease liabilities	Six Months Ended Cash paid for operating lease liabilities $ 174,919 Weighted-average remaining lease term (in years) 3.9 Weighted-average discount rate 10% Minimum future lease payments $ 1,259,690 The following table presents the Company’s future minimum lease obligation under ASC 840 as of December 31, 2018: 2019 349,837 2020 352,888 2021 367,636 2022 335,659 2023 28,589

7. Goodwill and Intangible As_2

7. Goodwill and Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of goodwill	Balance, December 31, 2017 $ 8,800,761 Acquisition of Bonnie Boat & Friends assets 52,500 Balance, December 31, 2018 $ 8,853,261 Activity for the period ended June 30, 2019 – Balance June 30, 2019 $ 8,853,261
Schedule of intangible assets	June 30, 2019 December 31, 2018 Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Intangible assets subject to amortization: Customer relationships 10.00 $ 1,600,286 (476,386 ) 1,123,900 $ 1,600,286 $ (396,371 ) $ 1,203,915 Mobile software applications 2.00 282,500 (282,500 ) – 282,500 (282,500 ) – NetSpective webfiltering software 2.00 1,134,435 (567,217 ) 567,218 1,134,435 (453,774 ) 680,661 Noncompete agreements 1.50 846,638 (846,638 ) – 846,638 (846,638 ) – Subtotal 3,863,859 (2,172,741 ) 1,691,118 3,863,859 (1,979,283 ) 1,884,576 Intangible assets not subject to amortization: Trade names 4,455,595 – 4,455,595 4,455,595 – 4,455,595 Total intangible assets $ 8,319,454 $ (2,172,741 ) $ 6,146,713 $ 8,319,454 $ (1,979,283 ) $ 6,340,171

9. Accounts Payable and Accru_2

9. Accounts Payable and Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2019
Payables and Accruals [Abstract]
Schedule of accounts payable and accrued liabilities	June 30, 2019 December 31, 2018 Earnout consideration payable in connection with NetSpective acquisition $ 362,500 $ 362,500 Executive and employee compensation 909,063 792,402 Interest on convertible debentures and promissory notes 301,784 210,221 Other accrued expenses and liabilities 61,988 67,914 Total accrued liabilities $ 1,635,335 $ 1,433,037

10. Related Party Payables (Tab

10. Related Party Payables (Tables)	6 Months Ended
	Jun. 30, 2019
Related Party Transactions [Abstract]
Schedule of Related Party Payables	Name Date Amount of Loan Principal Converted to Equity Conversion Price per Share Closing Price of Common Stock on Conversion Date Shares of Common Stock Issued Darren Marks 12/29/2017 333,333 $ 0.50 0.30 666,666 10/15/2018 333,333 $ 0.31 0.19 1,075,268 Melvin Leiner 12/29/2017 166,667 $ 0.50 0.30 333,334 10/15/2018 166,667 $ 0.31 0.19 537,635

12. Debt (Tables)

12. Debt (Tables)	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Schedule of convertible debt	June 30, December 31, Redeemable unsecured convertible note - TeleMate $ 1,000,000 1,000,000 Principal value of secured convertible notes 6,691,278 2,822,708 Loan discounts (494,235 ) (735,871 ) Less: Current portion (6,760,435 ) (676,223 ) Total convertible notes, net - noncurrent $ 436,608 $ 2,410,614
Schedule of future debt maturity payments	2019 $ 676,223 2020 $ 7,015,055

13. Stockholders' Equity (Table

13. Stockholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2019
Equity [Abstract]
Schedule of warrants	Number of Warrants Outstanding Weighted Avg. Exercise Price Weighted Avg. Contractual Life (Yrs.) Balance January 1, 2017 7,608,154 $ 0.26 0.75 Warrants issued 567,166 $ 1.50 2.00 Less: Warrants exercised (7,107,765 ) $ 0.24 Warrants forfeited (29,190 ) $ 0.24 December 31, 2017 1,038,365 $ 1.36 2.38 Warrants issued – – Warrants exercised (256,455 ) – Balance 31, 2018 781,910 $ 1.36 1.38 Warrants issued 1,233,333 0.30 3.00 Warrants forfeited – – Warrants exercised – – Balance June 30, 2019 2,015,243 $ 0.71 1.21
Schedule of options	Options Issued Options Forfeited Options Outstanding Vested Options Exercise Price Weighted Average Remaining Life in Years 10,862,850 3,961,500 6,901,350 6,901,350 $ 0.24 4.22 9,695,250 9,695,250 – – $ 0.36 – 938,250 938,250 – – $ 0.48 – 13,135,500 – 13,135,500 13,135,500 $ 0.72 0.66 5,481,000 – 5,481,000 5,481,000 $ 0.78 2.00 Total 40,112,850 14,595,000 25,517,850 25,517,850 $ 0.60 2.59

2. Summary of Significant Acc_4

2. Summary of Significant Accounting Policies (Details - Contract Assets and Liabilities) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Contract assets	$ 900,522	$ 1,123,493
Contract liabilities	1,272,250	1,120,228
Animation Contracts [Member]
Contract assets	812,645	1,040,309
Contract liabilities	629,671	380,749
NetSpective Contracts [Member]
Contract assets	79,176	74,743
Contract liabilities	631,079	727,979
Other Contracts [Member]
Contract assets	8,701	8,441
Contract liabilities	$ 11,500	$ 11,500

2. Summary of Significant Acc_5

2. Summary of Significant Accounting Policies (Details - Fair value) - USD ($)	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnout liability	$ 429,000	$ 429,000	$ 429,000
Fair Value, Inputs, Level 1 [Member]
Earnout liability	0
Fair Value, Inputs, Level 2 [Member]
Earnout liability	0
Fair Value, Inputs, Level 3 [Member]
Earnout liability	$ 429,000

2. Summary of Significant Acc_6

2. Summary of Significant Accounting Policies (Details - Change in fair value) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Derivative fair value, beginning balance	$ 429,000	$ 429,000
Change in fair value	0	0
Derivative fair value, ending balance	$ 429,000	$ 429,000

2. Summary of Significant Acc_7

2. Summary of Significant Accounting Policies (Details - Property useful lives)	6 Months Ended
	Jun. 30, 2019
Computers, Software and Office Equipment [Member]
Property and equipment useful lives	1-5 years
Machinery and Equipment [Member]
Property and equipment useful lives	3-5 years
Vehicles [Member]
Property and equipment useful lives	5 years
Furniture and Fixtures [Member]
Property and equipment useful lives	5-10 years
Leasehold Improvements [Member]
Property and equipment useful lives	Lesser of the lease term or estimated useful life

2. Summary of Significant Acc_8

2. Summary of Significant Accounting Policies (Details Narrative)	6 Months Ended
	Jun. 30, 2019USD ($)shares
Inventory write-down	$ 0
Intangible asset useful life range	1.5 to 10 years
Impairment of intangible assets	$ 0
Convertible Notes [Member]
Antidilutive shares | shares	20,380,780
Vested Stock Options [Member]
Antidilutive shares | shares	25,517,850
Stock Purchase Warrants [Member]
Antidilutive shares | shares	2,015,243
Animation Contracts [Member]
Revenue from contracts with customers	$ 3,707,458
Animation Contracts [Member] | Due to ASC 606 [Member]
Revenue from contracts with customers	$ 101,643

3. Accounts Receivable (Details

3. Accounts Receivable (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Receivables [Abstract]
Billed accounts receivable	$ 685,728	$ 419,802
Unbilled accounts receivable	214,794	703,691
Accounts receivable	$ 900,522	$ 1,123,493

3. Accounts Receivable (Detai_2

3. Accounts Receivable (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Bad debt expense	$ 0	$ 0
Sales Revenue, Net [Member] | Three Customers [Member]
Concentration percentage	42.60%		50.10%
Accounts Receivable [Member] | Three Customers [Member]
Concentration percentage	23.40%
Accounts Receivable [Member] | One Customer [Member]
Concentration percentage			9.20%

4. Prepaid Expenses and Other_3

4. Prepaid Expenses and Other Current Assets (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Prepaid expenses and other current assets	$ 336,422	$ 449,840
Collaborative Development Agreement [Member]
Prepaid expenses and other current assets	47,883	95,766
Prepaid Rent [Member]
Prepaid expenses and other current assets	32,956	31,773
Vendor Advances [Member]
Prepaid expenses and other current assets	5,659	7,867
Prepaid Service Agreements [Member]
Prepaid expenses and other current assets	138,767	174,920
Employee advance and other payroll related items [Member]
Prepaid expenses and other current assets	18,937	16,208
Other Prepaid Expenses and Current Assets [Member]
Prepaid expenses and other current assets	$ 92,220	$ 123,306

5. Property and Equipment (Deta

5. Property and Equipment (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Property and equipment, gross	$ 3,877,215	$ 3,672,580
Accumulated depreciation	(2,901,967)	(2,636,267)
Property and equipment, net	975,248	1,036,313
Computers, Software and Office Equipment [Member]
Property and equipment, gross	2,079,612	1,937,987
Accumulated depreciation	(1,713,418)	(1,508,104)
Property and equipment, net	366,194	429,883
Machinery and Equipment [Member]
Property and equipment, gross	173,976	167,731
Accumulated depreciation	(114,224)	(99,900)
Property and equipment, net	59,752	67,831
Vehicles [Member]
Property and equipment, gross	157,810	153,927
Accumulated depreciation	(64,435)	(120,728)
Property and equipment, net	93,375	33,199
Furniture and Fixtures [Member]
Property and equipment, gross	395,716	381,248
Accumulated depreciation	(307,740)	(284,410)
Property and equipment, net	87,976	96,838
Leasehold Improvements [Member]
Property and equipment, gross	1,070,101	1,031,687
Accumulated depreciation	(702,150)	(623,125)
Property and equipment, net	$ 367,951	$ 408,562

5. Property and Equipment (De_2

5. Property and Equipment (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 255,341	$ 170,668

6. Leases (Details)

6. Leases (Details)	6 Months Ended
	Jun. 30, 2019USD ($)
Leases [Abstract]
Cash paid for operting lease liabilities	$ 174,919
Weighted-average remaining lease term	3 years 10 months 24 days
Weighted average discount rate	10.00%
Minimum future lease payments	$ 1,259,690
Future lease payment 2019	349,837
Future lease payment 2020	352,888
Future lease payment 2021	367,636
Future lease payment 2022	335,659
Future lease payment 2023	$ 28,589

6. Leases (Details Narrative)

6. Leases (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Leases [Abstract]
Lease costs	$ 186,484
Righ-of-use asset	1,003,529	$ 0
Operating lease liability	$ 1,014,331

7. Goodwill and Intangible As_3

7. Goodwill and Intangible Assets (Details - Goodwill) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, beginning balance	$ 8,853,261	$ 8,800,761
Goodwill additions	0	52,500
Goodwill, ending balance	$ 8,853,261	$ 8,853,261

7. Goodwill and Intangible As_4

7. Goodwill and Intangible Assets (Details - Intangibles) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Finite intangible assets, gross	$ 3,863,859	$ 3,863,859
Accumulated amortization	(2,172,741)	(1,979,283)
Finite intangible assets, net	1,691,118	1,884,576
Indefinate lived intangible asset	4,455,595	4,455,595
Total intangible assets, gross	8,319,454	8,319,454
Total intangible assets, net	6,146,713	6,340,171
Trade Names [Member]
Indefinate lived intangible asset	4,455,595	4,455,595
Customer Relationships [Member]
Finite intangible assets, gross	1,600,286	1,600,286
Accumulated amortization	(476,386)	(396,371)
Finite intangible assets, net	$ 1,123,900	1,203,915
Amortization period	10 years
Mobile Software Applications [Member]
Finite intangible assets, gross	$ 282,500	282,500
Accumulated amortization	(282,500)	(282,500)
Finite intangible assets, net	$ 0	0
Amortization period	2 years
NetSpective webfiltering software [Member]
Finite intangible assets, gross	$ 1,134,435	1,134,435
Accumulated amortization	(567,217)	(453,774)
Finite intangible assets, net	$ 567,218	680,661
Amortization period	2 years
Noncompete Agreements [Member]
Finite intangible assets, gross	$ 846,638	846,638
Accumulated amortization	(846,638)	(846,638)
Finite intangible assets, net	$ 0	$ 0
Amortization period	1 year 6 months

7. Goodwill and Intangible As_5

7. Goodwill and Intangible Assets (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 193,458	$ 230,239

9. Accounts Payable and Accru_3

9. Accounts Payable and Accrued Liabilities (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Earnout consideration payable in connection with Netspective acquisition	$ 362,500	$ 362,500
Executive and employee compensation	909,063	792,402
Interest on convertible debentures and promissory notes	301,784	210,221
Other accrued expenses and liabilities	61,988	67,914
Total accrued liabilities	1,635,335	1,433,037
Compromise Settlement [Member]
Total accrued liabilities	$ 138,000	$ 138,000

10. Related Party Payables (Det

10. Related Party Payables (Details - Debt conversion) - USD ($)	9 Months Ended	12 Months Ended
	Oct. 15, 2018	Dec. 29, 2017
Darren Marks [Member]
Debt converted, amount converted	$ 333,333	$ 333,333
Debt converted, shares issued	1,075,268	666,666
Share price used for conversion	$ 0.31	$ 0.50
Grom common stock price on date of conversion	$ 0.19	$ 0.30
Melvin Leiner [Member]
Debt converted, amount converted	$ 166,667	$ 166,667
Debt converted, shares issued	537,635	333,334
Share price used for conversion	$ 0.31	$ 0.50
Grom common stock price on date of conversion	$ 0.19	$ 0.30

10. Related Party Payables (D_2

10. Related Party Payables (Details Narrative) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Due to related parties	$ 990,796	$ 1,181,645
Darren Mark's famity [Member]
Wages and salaries	39,638	180,800
Mark's LLC [Member]
Due to related parties	415,501	469,506
Leiner's LLC [Member]
Due to related parties	416,722	451,944
Thomas Rutherford [Member]
Due to related parties		50,000	$ 50,000
Wayne and Stella Dearing [Member]
Due to related parties	$ 108,573	$ 210,145

11. Other Noncurrent Liabilit_2

11. Other Noncurrent Liabilities (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Other Liabilities Disclosure [Abstract]
Accrued retirement benefit	$ 233,167	$ 224,797

12. Debt (Details - Convertible

12. Debt (Details - Convertible debentures) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Convertible debt, current	$ (6,760,435)	$ (676,223)
Convertible debt, net - noncurrent	436,608	2,410,614
Convertible Debentures [Member]
Unamortized discount	(494,235)	(735,871)
Convertible debt, current	(6,760,435)	(676,223)
Convertible debt, net - noncurrent	436,608	2,410,614
Redeemable unsecured Telemate [Member] | Convertible Debentures [Member]
Convertible debt, gross	1,000,000	1,000,000
Secured Convertible notes [Member] | Convertible Debentures [Member]
Convertible debt, gross	$ 6,691,278	$ 2,822,708

12. Debt (Details - Debt maturi

12. Debt (Details - Debt maturities)	Jun. 30, 2019USD ($)
Long-term debt maturity schedule
2019	$ 676,223
2020	$ 7,015,055

12. Debt (Details Narrative)

12. Debt (Details Narrative) - USD ($)	Jan. 15, 2019	Jan. 03, 2018	Jan. 02, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Nov. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Proceeds from convertible debt						$ 0	$ 1,186,135
Gain (loss) on extinguishment of debt				$ 0	$ 0	(363,468)	$ 0
Nine Accredited Investors [Member] | Newbridge Offering [Member]
Stock issued as inducement to lend, shares								730,974
TDH Acquisition Agreement [Member] | First Amendment [Member]
Debt maturity date		Jul. 1, 2019
Debt interest rate		10.00%
Earnout period maturity date		Dec. 31, 2019
TDH Acquisition Agreement [Member] | First Amendment [Member] | TDA Sellers [Member]
Stock issued new, shares		800,000
TDH Acquisition Agreement [Member] | Second Amendment [Member]
Debt maturity date	Apr. 2, 2020
Debt conversion price per share	$ 0.27
Gain (loss) on extinguishment of debt						$ (363,468)
Redeemable Unsecured Convertible Note [Member] | TeleMate [Member]
Debt initial date			Jan. 1, 2017
Debt face amount			$ 1,000,000
Debt maturity date			Jan. 1, 2020
Debt conversion price per share			$ 0.78
Redeemable Unsecured Convertible Note [Member] | Modification Agreement [Member] | TeleMate [Member]
Debt maturity date						Oct. 1, 2019
Debt conversion price per share				$ 0.48		$ 0.48
12% Secured Convertible Promissory Notes [Member] | Newbridge Offering [Member]
Debt initial date								Nov. 3, 2018
Proceeds from convertible debt								$ 552,000
Debt conversion price per share								$ 0.40
2018 Secured Convertible Notes [Member]
Proceeds from convertible debt									$ 1,238,485	$ 601,223
Debt interest rate									10.00%	10.00%
Debt conversion price per share									$ 0.50	$ 0.78
Original issue discount									$ 247,697	$ 60,122
Stock issued as inducement to lend, shares									150,305
Stock issued as inducement to lend, value									$ 78,321

13. Stockholders' Equity (Detai

13. Stockholders' Equity (Details - Warrant activity) - Stock Purchase Warrants [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Number of warrants
Warrants outstanding, beginning balance	781,910	1,038,365	7,608,154
Warrants issued	1,233,333	0	567,166
Warrants exercised	0	(256,455)	(7,107,765)
Warrants forfeited	0		(29,190)
Warrants outstanding, ending balance	2,015,243	781,910	1,038,365
Weighted Average Exercise Price
Weighted Average Exercise Price, Warrants outstanding, beginning balance	$ 1.36	$ 1.36	$ 0.26
Weighted Average Exercise Price, Warrants issued	0.30		1.50
Weighted Average Exercise Price, Warrants exercised			0.24
Weighted Average Exercise Price, Warrants forfeited			0.24
Weighted Average Exercise Price, Warrants outstanding, ending balance	$ 0.71	$ 1.36	$ 1.36
custom:AverageRemainingContractualTermAbstract
Average Remaining Contractual Term, Warrants outstanding	1 year 4 months 17 days	2 years 4 months 17 days	9 months
Average Remaining Contractual Term, Warrants issued	3 years		2 years

13. Stockholders' Equity (Det_2

13. Stockholders' Equity (Details - Option Activity) - Options [Member]	6 Months Ended
	Jun. 30, 2019$ / sharesshares
Options issued	40,112,850
Options forfeited	14,595,000
Options outstanding	25,517,850
Vested options	25,517,850
Strike price | $ / shares	$ 0.60
Weighted average remaining life	2 years 7 months 2 days
Option 1 [Member]
Options issued	10,862,850
Options forfeited	3,961,500
Options outstanding	6,901,350
Vested options	6,901,350
Strike price | $ / shares	$ 0.24
Weighted average remaining life	4 years 2 months 19 days
Option 2 [Member]
Options issued	9,695,250
Options forfeited	9,695,250
Options outstanding	0
Vested options	0
Strike price | $ / shares	$ 0.36
Option 3 [Member]
Options issued	938,250
Options forfeited	938,250
Options outstanding	0
Vested options	0
Strike price | $ / shares	$ 0.48
Option 4 [Member]
Options issued	13,135,500
Options forfeited	0
Options outstanding	13,135,500
Vested options	13,135,500
Strike price | $ / shares	$ 0.72
Weighted average remaining life	7 months 28 days
Option 5 [Member]
Options issued	5,481,000
Options forfeited	0
Options outstanding	5,481,000
Vested options	5,481,000
Strike price | $ / shares	$ 0.78
Weighted average remaining life	2 years

13. Stockholders' Equity (Det_3

13. Stockholders' Equity (Details Narrative) - USD ($)	2 Months Ended		3 Months Ended				6 Months Ended
	Mar. 11, 2019	Feb. 27, 2019	Jun. 30, 2019	Apr. 02, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Feb. 22, 2019	Dec. 31, 2018
Preferred stock, shares authorized			25,000,000				25,000,000			25,000,000
Preferred stock, par value			$ .001				$ .001			$ .001
Proceeds from the issuance of preferred stock							$ 411,151	$ 0
Proceeds from issuance of common stock							698,849	0
Proceeds from warrant exercises							0	61,500
Stock based compensation			$ 16,200		$ 92,970		$ 32,400	169,163
Issuance of common stock in connection with the issuance of convertible debentures, value			$ 18,932		88,421	$ 109,839
Issuance of common stock in connection with the acquisition of a business, value					$ 52,500
Convertible Debentures [Member]
Issuance of common stock in connection with the issuance of convertible debentures, shares							80,130
Issuance of common stock in connection with the issuance of convertible debentures, value							$ 18,932
Options [Member]
Stock based compensation							$ 0	$ 920
Employees, Officers and Directors [Member]
Stock issued for compensation, shares							0	595,321
Stock issued for compensation, value								$ 292,443
Consultants and Other Professionals [Member]
Stock issued for compensation, shares							1,876,782	634,500
Stock issued for compensation, value							$ 458,997	$ 335,250
Various Investors [Member]
Stock issued as inducement to lend, shares								328,371
Stock issued as inducement to lend, value								$ 198,260
TDA Sellers [Member] | Secured Promissory Notes [Member]
Stock issued as inducement to lend, shares							800,000	800,000
Stock issued as inducement to lend, value							$ 480,000	$ 480,000
Bonnie Boat [Member]
Issuance of common stock in connection with the acquisition of a business, shares								150,000
Issuance of common stock in connection with the acquisition of a business, value								$ 52,000
Warrant Exercises [Member]
Stock issued for warrant exercises, shares							0	256,455
Proceeds from warrant exercises								$ 61,244
Payment for payables [Member]
Issuance of common stock in lieu of cash for loans payable and other accrued obligations, shares							99,720	285,627
Issuance of common stock in lieu of cash for loans payable and other accrued obligations, value							$ 26,940	$ 171,376
Private Placement [Member]
Stock issued new, shares							1,233,333	0
Warrants issued							1,233,333
Proceeds from issuance of common stock							$ 185,000
Series A Preferred Stock [Member]
Preferred stock, shares authorized									2,000,000
Preferred stock, par value									$ 0.001
Proceeds from the issuance of preferred stock	$ 400,000	$ 400,000		$ 125,000
Stock issued new, shares	400,000	400,000		125,000
Beneficial conversion feature							$ 740,899
Restricted Stock [Member]
Stock issued new, shares	2,000,000	2,000,000		625,000

14. Commitments and Contingen_2

14. Commitments and Contingencies (Details Narrative)	6 Months Ended
	Jun. 30, 2019USD ($)
Boca Raton, Florida [Member]
Operating lease payment frequency	monthly
Operating lease payment	$ 4,227
Lease expiration date	Sep. 30, 2021
Manila, Philippines [Member]
Operating lease payment frequency	monthly
Operating lease payment	$ 22,533
Lease expiration date	Dec. 31, 2022
NetSpective Division [Member]
Operating lease payment frequency	monthly
Operating lease payment	$ 2,055
Lease expiration date	Dec. 31, 2023