10. Related Party Payables

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Related Party Payables

10.  RELATED PARTY PAYABLES AND ACTIVITY

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 periods ended December 31, 2018, and December 31, 2017, was $180,800 and $165,800, respectively, which the Company believes 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 were made to the Company during the years ended December 31, 2018, and December 31, 2017. Neither Mr. Marks nor Mr. Leiner have any intention of calling these loans at present. 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		Share Price Used for conversion		Trading price of Grom stock on the date of conversion		Shares 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

The outstanding amount due to Mr. Marks and Mr. Leiner’s LLC’s were $469,506 and $1,215,442; and $451,944 and $861,198 as of December 31, 2018 and December 31, 2017, respectively. Additionally, we owed $50,000 to Dr. Rutherford our director who extended a short-term loan to the Company, and $210,145 to Wayne and Stella Dearing who have extended loans to Top Draw animation to assist with its liquidity.

As of December 31, 2018, and December 31, 2017, the balances in related party payables were $1,181,645 and $2,076,640, respectively.