GROM SOCIAL ENTERPRISES, INC. REPORTS FINANCIAL RESULTS FOR 2021 FIRST QUARTER PERIOD
BOCA RATON, May 18, 2021 — Grom Social Enterprises, Inc. (OTCQB: GRMM) (“Grom” or the Company”), today reported operating and financial results for the first quarter period ending March 31, 2021. Investors are encouraged to read the Company’s quarterly report on Form 10-Q when it is filed with the Securities and Exchange Commission, (the “SEC”), which will contain additional details, and will be posted at www.gromsocial.com
FIRST QUARTER FINANCIAL PERFORMANCE
- Revenues for the first quarter were $1.87 million compared to $1.29 million in the 2020 first quarter period, a 45% increase.
- Gross profit for the first quarter was $1.07 million, compared to $0.68 million in the prior year period, a 58% increase.
- Loss from operations narrowed to $710,849 compared to a loss of $1.06 million in the prior year period, a 33% improvement.
- Net loss for the first quarter was $2.31 million compared to $1.34 million in the prior year period. The losses in the first quarter of 2021 were driven largely by non-cash charges related to the settlement of debt and amortization charges categorized as interest expense.
- On March 31, 2021, total stockholders’ equity was $10.73 million, compared to $8.59 million on December 31, 2020, a 24.8% increase.
Commenting on the results, Darren Marks, Chairman and Chief Executive Officer of Grom said, “We’re very pleased with our performance in the first quarter. As we exit the Covid-19 pandemic, we’re showing substantial improvement in a number of important areas and continue to grow the enterprise. The 45% increase in sales is a dramatic rebound and brings us almost entirely back to where revenues were just prior to the March 2020 shutdowns related to Covid-19. In addition to the increase in revenues, we saw a 17.7% increase in new users and more than an 11% increase in online duration of visits and these KPIs continue to show recent improvement. Our net loss included a non-cash charge of nearly $950,000 related to the conversion of note holders, a move that enhanced our capital position despite the contribution to net loss. In addition, a large portion of the increased interest expense in the first quarter was also non-cash and was related to the amortization of certain debt discounts. Absent these non-cash charges, our net loss for the first quarter would have reflected a considerably smaller loss than that of the prior year period and highlights our improving financial performance.”
Marks continued, “We have added key personnel and now boast an enhanced, industry savvy management team. We recently announced our intention to acquire Curiosity Ink Media. While the acquisition has not closed just yet, the company has already begun to generate positive momentum with the anticipated debut of Santa.com., an online hub where kids and adults can experience classic holiday joy in a one-stop, modern digital holiday venue. Our improved financial results, the optimism arising from opening economies and other initiatives to improve our visibility with the investment community are all a result of management’s focus on executing our business plan and building shareholder value.”
About Grom Social Enterprises, Inc.
Grom Social Enterprises, Inc. is a growing social media platform and original content provider of entertainment for children under 13 years of age, which provides safe and secure digital environments for kids that can be monitored by their parents or guardians. The Company has several operating subsidiaries, including Grom Social, which delivers its content through mobile and desktop environments (web portal and apps) that entertain children, let them interact with friends, access relevant news, and play proprietary games while teaching them about being good digital citizens. The Company owns and operates Top Draw Animation,, which produces award-winning animation content for some of the largest international media companies in the world. Grom also includes Grom Educational Services, which has provided web filtering services for K-12 schools, government and private businesses. For more information, please visit.gromsocial.com.
This press release contains statements, which may constitute “forward-looking statements.”. Those statements include statements regarding the intent, belief, or current expectations of Grom and members of its management team as well as the assumptions on which such statements are based. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that may cause actual results to differ from those anticipated are discussed throughout the Company’s reports filed with Securities and Exchange Commission which are available at www.sec.gov as well as the Company’s web site at www.gromsocial.com. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.