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What changed in Glimpse Group, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Glimpse Group, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+261 added−281 removedSource: 10-K (2024-09-30) vs 10-K (2023-09-28)

Top changes in Glimpse Group, Inc.'s 2024 10-K

261 paragraphs added · 281 removed · 188 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

43 edited+18 added−33 removed9 unchanged
Biggest changeTitle of Invention Subsidiary Initial Filing Date Issuance Date Patent Number Issued Patents: Pagoni VR 06-21-2018 Oct ‘19 10445941 Interactive Mixed Reality System for a Real World Event Immersive Display System with Adjustable Perspective Pagoni VR 11-27-2018 Sept ‘20 10764553 Augmented Reality Geolocation Using Image Matching KreatAR 08-22-2018 March ‘21 10949669 System for Sharing User-Generated Content Pagoni VR 06-12-2019 Aug ‘21 11095947 Presenting a Simulated Reality Experience in a Preset Location Post Reality 06-14-2019 Nov ‘21 11189097 Virtual Reality System Cross Platform Foretell Reality 04-23-2019 April ‘22 11294453 Simulated Reality Adaptive User Space Foretell Reality 07-26-2019 April ‘22 11288868 Marker-Based Positioning of Simulated Reality KreatAR 04-23-2019 July ‘22 11380011 System and Method for Generating an Augmented Reality Experience Brightline 11-19-2020 April ‘22 11302038 Immersive Ecosystem Brightline 08-05-2020 June ‘22 11373383 Filed Patents: Real-Time Visualization of Head Mounted Display User Reactions Foretell Reality 04-06-2022 Audio Processing In a Virtual Environment Adept Reality 06-22-2022 AI Controlled Non-Human Conversation Flow in VR Foretell Reality 06-12-2023 Dispositional Affect for Virtual Character Interactions in VR Applications Foretell Reality 12-13-2022 Large Language Model Artificial Intelligence Spatial Core: A Collaborative Spatial Computing Platform Brightline 06-01-2023 10 We may continue to file for patents regarding various aspects of our products, services and technologies at a later date depending on the costs and timing associated with such filings.
Biggest changeFiled Patents Name Entity Filing Date US Patent # AUDIO PROCESSING IN A VIRTUAL ENVIRONMENT Adept Reality, LLC 6/15/2022 17/841,258 REAL-TIME VISUALIZATION OF HEAD MOUNTED DISPLAY USER REACTIONS Foretell Studios, LLC 4/6/2022 17/714,953 DISPOSITIONAL AFFECT FOR VIRTUAL CHARACTER INTERACTIONS IN VR APPS The Glimpse Group, Inc. 6/13/2023 18/401,868 BE ANYONE AND ANYTHING Foretell Studios, LLC 12/13/2022 18/401,879 SPATIAL CORE: A COLLABORATIVE SPATIAL COMPUTING PLATFORM Brightline Interactive, LLC 6/1/2023 63/470,293 CONTROLLED NON-HUMAN CONVERSATION FLOW IN VR The Glimpse Group, Inc. 4/3/2023 63/456,571 We may continue to file for patents regarding various aspects of our products, services and technologies in the future depending on the costs and timing associated with such filings.
As such, there are relatively few participants on the Hardware side, some very large (for example: Meta/Facebook, Microsoft, Samsung, Google, Apple, ByteDance (Pico), HTC, HP, Lenovo, Sony and Epson) and some much smaller (for example: Magic Leap, XREAL, Varjo and Vuzix). In general, Hardware cycles have been accelerating and performance improving, with simplified usability and reduced end-user costs.
As such, there are relatively few participants on the Hardware side, some very large (for example: Meta (formerly, Facebook), Microsoft, Samsung, Google, Apple, ByteDance (Pico), HTC, HP, Lenovo, Sony and Epson) and some much smaller (for example: Magic Leap, XREAL, Varjo and Vuzix). In general, Hardware cycles have been accelerating and performance improving, with simplified usability and reduced end-user costs.
Since Immersive technology is an emerging industry, market and customer education are material and therefore the length of the typical sales cycle can be between 3 and 18 months, depending on the size and complexity of the proposed solution and the customer’s level of understanding of the Immersive technology space and prior experience.
Since Immersive technology is an emerging industry, market and customer education are material and therefore the length of the typical sales cycle can be between three and 18 months, depending on the size and complexity of the proposed solution and the customer’s level of understanding of the Immersive technology space and prior experience.
The leadership team of each subsidiary company, in addition to their initial equity ownership in Glimpse, may also have an economic interest that typically takes form in either: i) a 5-10% economic interest in the total net sale proceeds of the subsidiary upon a divestiture event or ii) additional Glimpse equity issuances based on revenue milestones achieved by the subsidiary company over a period of several years (typically three years).
The leadership team of each entity, in addition to their initial equity ownership in Glimpse, may also have an economic interest that typically takes form of either: (i) a 5-10% economic interest in the total net sale proceeds of the entity upon a divestiture event or (ii) additional Glimpse equity issuances based on revenue milestones achieved by the entity over a period of several years (typically three years).
While distinct, VR and AR are related, utilize some similar underlying technologies and are expected to become increasingly interconnected - combined they are often referred to as Immersive Technology (XR). VR and AR are emerging technologies, and the markets for them are still nascent.
While distinct, VR, AR and Spatial Computing are related, utilize some similar underlying technologies and are expected to become increasingly interconnected - combined they are often referred to as Immersive technology. Immersive technologies are emerging technologies, and the markets for them are still nascent.
As of the date of this disclosure and summarized in the table below, we have been issued 10 patents by the United States Patent and Trademark Office (the “USPTO”) and have an additional 5 filed patent applications in process.
As of the date of the filing of this Report, and as summarized in the table below, we have been issued 10 patents by the United States Patent and Trademark Office (“USPTO”) and have an additional 5 filed patent applications in process.
Each of our subsidiary companies share operational, financial and IP infrastructure, facilitating shorter time-to-market, higher quality products, reduced development costs, fewer redundancies, significant go-to-market synergies and, ultimately, a higher potential for success for each subsidiary company. We believe that our collaborative platform is unique and necessary, especially given the early nature of the Immersive technology industry.
Each of our ecosystem entities share operational, financial and IP infrastructure, facilitating shorter time-to-market, higher quality products, reduced development costs, fewer redundancies, significant go-to-market synergies and, ultimately, a higher potential for success for the Company. We believe that our collaborative ecosystem is unique and necessary, especially given the early nature of the Immersive technology industry.
Typically, customer contracts can be canceled at any time by the customer upon 30-90 day written notice (depending on the size and complexity of the contract). In such an event, the customer would owe the Company unpaid amounts up until the point of cancelation.
Typically, customer contracts can be canceled at any time by the customer upon 30-90 days’ written notice (depending on the size and complexity of the contract). In such an event, the customer would owe us unpaid amounts up until the point of cancelation.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our services or to obtain and use information that we regard as proprietary. The laws of many countries do not protect proprietary rights to the same extent as the laws of the U.S.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our services or to obtain and use information that we regard as proprietary. The laws of many countries do not protect proprietary rights to the same extent as the laws of the United States.
In accordance with industry practice, we protect our proprietary products, technology and competitive advantage through a combination of contractual provisions and trade secrets, patents, copyright and trademark laws in the United States and other jurisdictions where business is conducted.
Intellectual Property Our intellectual property is an integral part of our business strategy and practice. In accordance with industry practice, we protect our proprietary products, technology and competitive advantage through a combination of contractual provisions and trade secrets, patents, copyright and trademark laws in the United States and other jurisdictions where we conduct business.
We believe that Immersive technologies and solutions have the potential to fundamentally transform how people and businesses interact, further enabling remote work, education and commerce. Immersive technologies are also expected to increasingly interconnect with other emerging technologies such as artificial intelligence, spatial computing, computer vision, big data, NFT and crypto currencies.
We believe that Immersive technologies and solutions have the potential to fundamentally transform how people and businesses interact, further enabling remote work, education and commerce. Immersive technologies are also expected to increasingly interconnect with other emerging technologies such as AI, cloud computing, computer vision, big data, and blockchain.
Economic Dependence For the year ended June 30, 2023, one customer accounted for approximately 26% of our revenues and another for approximately 21% of our revenues. No other customer accounted for more than 10% of our revenues for the year ended June 30, 2023.
Economic Dependence For the year ended June 30, 2024, one customer accounted for approximately 23% of our revenues and another for approximately 15% of our revenues. No other customer accounted for more than 10% of our revenues for the year ended June 30, 2024.
Many are consumer oriented, whereas we are entirely enterprise focused (B2B, B2B2C). We believe that the Immersive Technology Software segment is currently far less competitive than traditional software markets, as most companies in the space tend to be early stage and often underfunded. While competition is evolving, there is currently no dominant player in any particular VR/AR Software segment.
We believe that the Software segment is currently far less competitive than traditional software markets, as most companies in the space tend to be early stage and often underfunded. While competition is evolving, there is currently no dominant player in any particular Immersive technology Software segment.
Immersive Technology Hardware (Headsets) (“Hardware”): We do not develop any Hardware, and our software and service solutions are mostly compatible with any Hardware. We believe that Hardware development, commercialization and distribution are highly capital intensive and there is not yet large enough scale or mass adoption in the Immersive technology industry to justify such expenditures for a smaller company.
We believe that Hardware development, commercialization and distribution are highly capital intensive and there is not yet large enough scale or mass adoption in the Immersive technology industry to justify such expenditures for a smaller company.
We believe that there are a select number of earlier stage companies of approximately our size that provide Immersive Technology and could be viewed as potential competitors. In addition, several of the larger technology players provide general infrastructure Immersive Technology Software.
We believe that there are a select number of earlier stage companies of approximately our size that provide Immersive technology and could be viewed as potential competitors.
Our subsidiary companies currently target a wide array of industry verticals, including but not limited to: Corporate Training, Education, Healthcare, Government & Defense, Branding/Marketing/Advertising, Retail, Financial Services, Food & Hospitality, Media & Entertainment, Architecture/Engineering/Construction (“AEC”), Corporate Events and Presentations, Beauty and Cosmetics, and Social VR support groups and therapy.
We currently target a wide array of industry verticals, including but not limited to: Corporate Training, Education, Healthcare, Government & Defense, Branding/Marketing/Advertising, Retail, Financial Services, Food & Hospitality, Media & Entertainment, Architecture/Engineering/Construction, Corporate Events and Presentations and Social VR support groups and therapy. We focus primarily on the business-to-business (“B2B”) and business-to-business-to-consumer (“B2B2C”) segments industry and we are hardware agnostic.
We believe that this industry has significant growth potential across verticals, may be transformative and that our diversified platform and ecosystem create important competitive advantages.
The Immersive technology industry is an early-stage technology industry with nascent markets. We believe that this industry has significant growth potential across verticals, may be transformative, and that our diversified ecosystem create important competitive advantages.
Although the purpose of our platform is to grow and develop the ecosystem on which each of our subsidiaries can mature by benefitting from collaboration, each subsidiary company targets a specific industry vertical (e.g., Healthcare, Education, Corporate Training, etc.) and as such has a distinct set of potential acquirers or investors.
Although our intent is to grow and develop the ecosystem, each of our entities targets a specific industry vertical (e.g., Healthcare, Education, Corporate Training, Military, etc.) and as such has a distinct set of potential acquirers or investors.
Corporate Information Information contained on our websites, including www.theglimpsegroup.com , shall not be deemed to be part of this filing or incorporated herein by reference and should not be relied upon by prospective investors for the purposes of determining whether to invest in the Company.
Information contained on, or accessible through our website, is not and shall not be deemed to be part of, or incorporated or deemed incorporated by reference into, this Report, and should not be relied upon by prospective investors for the purposes of determining whether to invest in us or our securities.
We believe that we offer significant exposure to the rapidly growing and potentially transformative Immersive technology markets, while mitigating downside risk via our diversified model and ecosystem.
Glimpse’s operating entities are located primarily in the United States, with a development and modeling center in Turkey. We believe that we offer significant exposure to the rapidly growing and potentially transformative Immersive technology markets, while mitigating downside risk via our diversified model and ecosystem.
We operate in an early stage industry, and customers are exploring various options for Immersive technology solutions and acting as early adopters of these solutions. As such, there has been a high degree of variance on our source of revenues while customers are on-boarded and our software product and solutions are integrated, measured and digested.
No other customer accounted for more than 10% of our revenues for the year ended June 30, 2023. 8 We operate in an early stage industry, and customers are exploring various options for Immersive technology solutions and acting as early adopters of these solutions. As such, there has been a high degree of variance on our source of revenues.
Our platform of Immersive technology subsidiary companies, collaborative environment and diversified business model aims to simplify the challenges faced by companies in the emerging Immersive technology industry, potentially improving each subsidiary company’s ability to succeed, while simultaneously providing investors an opportunity to invest directly via a diversified infrastructure.
Our ecosystem of Immersive technology entities, collaborative environment and diversified business model aims to simplify the challenges faced by companies in the emerging Immersive technology industry, create scale, build operational efficiencies, reduce time to market and enhance go-to-market synergies, while simultaneously providing investors an opportunity to invest directly via a diversified infrastructure.
Our platform is currently comprised of numerous active wholly-owned subsidiary companies, each targeting different industry segments in a non-competitive, collaborative manner. Our experienced management and dynamic Immersive technology entrepreneurs have deep domain expertise, providing the foundation for value-add-collaborations throughout our ecosystem.
The Glimpse Ecosystem We develop, commercialize and market innovative and proprietary Immersive technology software products, solutions and intellectual property (“IP”). Our ecosystem is comprised of several entities, each targeting different industry segments in a non-competitive, collaborative manner. Our experienced management and dynamic Immersive technology entrepreneurs and employees have deep domain expertise, providing the foundation for value-add-collaborations throughout our ecosystem.
Since Facebook released its first VR headset as a consumer product in 2016 (after its $2B+ acquisition of Oculus), successive iterations of it, as well as others, such as the recently announced Apple Vision Pro, have become significantly lighter, more comfortable, lower priced, with higher resolution and increasingly wireless/mobile.
Leading technology companies such as Meta (formerly, Facebook), Apple, Microsoft, Google, ByteDance (Pico), Samsung, Sony, HTC and HP have been at the forefront of VR/AR hardware development and software infrastructure, while also increasing integration of their products with AR and VR capabilities. 6 Since Meta released its first VR headset as a consumer product in 2016 (after its $2B+ acquisition of Oculus), successive iterations of it, as well as others, such as the Apple Vision Pro, have become significantly lighter, more comfortable, lower priced, with higher resolution and increasingly wireless/mobile.
Augmented Reality (AR) is a less immersive experience, where the user views their immediate physical environment with digital images overlaid, via a phone, tablet or a dedicated HMD such as smart glasses.
Augmented Reality (AR) is a less immersive experience, where the user views their immediate physical environment with digital images overlaid, via a phone, tablet or a dedicated HMD such as smart glasses. Spatial Computing are the computer processes and tools used to capture, process to blend 3D data into real physical space, often by utilizing VR and AR HMDs.
As an integral part of the business development and sales processes, each subsidiary company’s general manager is very familiar with the product offerings of other subsidiary companies and leverages those into his or her own efforts when appropriate. This leads to substantial cross marketing collaboration.
As an integral part of the business development and sales processes, each entity’s general manager is very familiar with the product offerings of the other entities and leverages those into his or her own efforts when appropriate. On occasion, we enter into distribution partnerships for our products with third parties.
For most customers we charge 25-50% of the contract value upfront and the amounts are usually not refundable, mitigating some of the contract cancellation risk. While it does happen on occasion, it is rare that a signed contract is canceled. Facilities We are based in New York, New York, with a lease through 2024.
For most customers we charge 25-50% of the contract value upfront and the amounts are usually not refundable, mitigating some of the contract cancellation risk. While it does happen on occasion, it is uncommon that a signed contract is canceled. Human Capital At June 30, 2024, we had 112 full time employees, primarily software developers, engineers and 3D artists.
As previously described, we believe that our structure, ecosystem and integrated capabilities create significant competitive advantages for each of our subsidiary companies, not available to other Software companies in the Immersive technology space.
We believe that we have the potential to become a leader in the this software space, led by our Spatial Core offerings. As previously described, we believe that our structure, ecosystem and integrated capabilities create significant competitive advantages, not available to other Software companies in the Immersive technology space and significantly improving our ability to succeed in an emerging space.
Beyond the expected financial impact of each such potential addition, these could also enhance our ecosystem, technology, scale and competitive position. These potential acquisitions may be domestic or international.
We may continue to add to our ecosystem both companies and technologies, subject to the availability of capital and attractive deal terms. Beyond the expected financial impact of each such potential addition, these could also enhance our ecosystem, technology, scale and competitive position.
ITEM 1. BUSINESS History The Glimpse Group, Inc. was incorporated on June 15, 2016, under the laws of the State of Nevada and is headquartered in New York, New York.
ITEM 1. BUSINESS History The Glimpse Group, Inc. was incorporated in June 2016 under the laws of the State of Nevada, and is headquartered in New York, New York. Company Overview The Glimpse Group, Inc. (“Glimpse”, the “Company”) is an Immersive technology company, providing enterprise focused Virtual Reality (VR), Augmented Reality (AR) and Spatial Computing software and services.
We and our subsidiary companies continue to develop a shared partner ecosystem to further scale business and expand our solutions into new and existing target markets. 8 Competitive Environment We believe that our competitors in the Immersive technology industry are focused on two primary segments: VR/AR Hardware (headsets) and Software.
Competitive Environment We believe that our competitors in the Immersive technology industry are focused on two primary segments: VR/AR Hardware (headsets) and Software. Immersive Technology Hardware (Headsets) (“Hardware”): We do not develop any Hardware, and our software and service solutions are mostly compatible with any Hardware.
We believe infrastructure software benefits us, and the industry at large, as they are not industry specific and enable companies like us to more effectively build industry specific solutions, thereby saving significant costs and development efforts. Platform Expansion and Diversification Strategy As described above in “Competitive Environment,” the Immersive Technology Software and services industries are highly fragmented.
We do not view these larger companies as competition, but rather as complementary to our business (indeed, some of these are our customers). We believe infrastructure software benefits us, and the industry at large, as they are not industry-specific and enable companies like us to more effectively build industry-specific solutions, thereby saving significant costs and development efforts.
If a subsidiary company is divested and the proceeds are substantive, then our intent is to distribute the majority of the net proceeds to our shareholder base, if such distribution would not jeopardize our growth and operations. Intellectual Property Our intellectual property is an integral part of our business strategy and practice.
If an entity is divested and the proceeds are substantive, then our intent is to distribute the majority of the net proceeds to our stockholder base, if such distribution would not jeopardize our growth and operations. We have, and may continue, to divest entities due to lower than expected performance or a shift in our strategic focus.
In particular: ARCore from Google and ARKit from Apple, which enable AR functionality on smartphones and tablets; and Unity and Unreal from Epic, which enable software languages used in VR and AR programing. We do not view these larger companies as competition, but rather as complementary to our business (indeed, some of these are customers of ours).
In addition, several of the larger technology players provide general infrastructure Software, such as, ARCore from Google and ARKit from Apple, which enable AR functionality on smartphones and tablets, and Unity and Unreal from Epic, which enable software languages used in VR and AR programing.
By striving to balance cash burn and growth, our goal is to lower dilution and support greater independence from capital markets, thereby increasing resiliency and maximizing upside potential. As part of our platform, we provide a centralized corporate structure, which significantly reduces general and administrative costs (financial, operational, legal & IP), streamlines capital allocation and helps in coordinating business strategies.
By offering technologies and solutions in various industry segments, we aim to reduce dependency on any single entity, technology or industry segment. As part of our platform, we provide a centralized corporate structure, which significantly reduces general and administrative costs (financial, operational, legal & IP), streamlines capital allocation and helps in coordinating business strategies.
QReal, LLC (dba QReal) : Creation of lifelike photorealistic 3D interactive digital models and experiences in AR 2. Immersive Health Group, LLC (IHG) : VR/AR platform for evidence-based and outcome driven healthcare solutions 3. Foretell Studios, LLC (dba Foretell Reality) : Customizable social VR platform for behavioral health, support groups, collaboration, corporate training, soft skills training, higher education 4.
Sector 5 Digital, LLC (“S5D”) : Corporate immersive experiences and events. 3. Glimpse Learning, LLC : Immersive education, training and upskilling. 4. Foretell Studios, LLC (d/b/a Foretell Reality) : Customizable social VR platform for behavioral health, support groups, collaboration, corporate training, soft skills training and higher education. 5.
The more advanced, easier to use and cheaper the Hardware becomes, the higher the potential for the development of robust software applications and increased market adoption of Immersive technology solutions. Immersive Technology Software (“Software”): In contrast to Immersive Technology Hardware, Software is highly fragmented with hundreds of Immersive Technology Software companies targeting different segments and solutions.
The more advanced, easier to use and cheaper the Hardware becomes, the higher the potential for the development of robust software applications and increased market adoption of Immersive technology solutions. We also believe that while the core computing is done on the headset, the size of the headset will remain relatively large/heavy and the level of applications limited.
That being said, we continue to have a handful of customers that comprise the majority of our revenues. A significant reduction in revenue from our larger customers could have a material negative impact on our operations.
A customer that may account for a higher concentration of revenue in one period may not account for any revenue in subsequent periods. A significant reduction in revenue from our larger customers could have a material negative impact on our operations.
There are numerous potential acquisition targets that, while having established a niche market position, product or technology, have limited resources and ability to pursue growth initiatives. We may continue to add to our platform both companies, technologies and other appropriate targets, subject to the availability of capital, at attractive deal terms.
Expansion and Diversification Strategy As described above in “Competitive Environment,” the Immersive Technology Software and services industries are highly fragmented. There are numerous potential acquisition targets that, while having established a niche market position, product or technology, have limited resources and ability to pursue growth initiatives.
One of these same customers and a different customer accounted for approximately 40% and 14% of revenues, respectively, for the year ended June 30, 2022. For the fiscal year ended June 30, 2022, no other customer accounted for 10% or more of our revenues.
For the year ended June 30, 2023, one customer accounted for approximately 26% of our revenues and another for approximately 21% of our revenues.
Our subsidiary companies’ business development and sales teams are enhanced by the shared resources and influence of our ecosystem. Our management takes an active role in the business development activities of each subsidiary company and in the overall development and integration of sale strategies, goals and budgets.
Business Development and Sales Each of our entities has its own business development and sales team to better focus on specific industry segments, with input and coordination from Glimpse’s management team. Our management takes an active role in the business development activities of each entity and in the overall development and integration of sale strategies, goals and budgets.
We currently have multiple locations in the US, offices in several locations in Turkey and an international presence in the UK and Israel. 9 Strategic Divestitures Each one of our subsidiary companies has the potential to be divested or spun off.
These potential acquisitions may be domestic or international. 7 Strategic Divestitures Each one of our entities has the potential to be divested or spun off.
This allows our subsidiary company general managers to focus their time and effort almost exclusively on the core software, product and business development activities relating to their subsidiary. Additionally, aligned economic incentives encourage cross-Company collaboration. Substantially all of our employees own equity in our Company.
All employees, no matter which entity they are allocated to, are Glimpse employees. 4 Additionally, aligned economic incentives encourage cross-company collaboration. Substantially all of our employees own equity in our Company.
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COMPANY OVERVIEW We are an Immersive technology (Virtual Reality (“VR”), Augmented Reality (“AR”), Spatial Computing, Artificial Intelligence (“AI”)) platform company, comprised of a diversified group of wholly-owned and operated Immersive technology companies, providing enterprise-focused software, services and solutions.
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In fiscal year 2024, we shifted our businesses focus to providing immersive technology solutions software and services that are primarily driven by Spatial Computing, Cloud and Artificial Intelligence (“AI”), which we refer to as “Spatial Core”. While this transition is still ongoing, we believe that Spatial Core is a key differentiator, growth driver and competitive advantage for us.
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By leveraging our platform, we strive to cultivate and manage the business operations of our Immersive technology subsidiary companies, with the goal of allowing each underlying company to better focus on mission-critical endeavors, collaborate with the other subsidiary companies, reduce time to market, optimize costs, improve product quality and leverage joint go-to-market strategies.
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We believe that this ownership mechanism is a strong driver of cross-pollination of ideas and fosters collaboration. While each entity owns its own IP, our parent company currently owns 100% of each entity. Organizational Chart: Glimpse Ecosystem Entities 1. Brightline Interactive, LLC (“BLI”) : Immersive and interactive experiences, training scenarios, and simulations for both government and commercial customers. 2.
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Subject to operational, market and financial developments and conditions, we intend to carefully add to our current portfolio of subsidiary companies via a combination of organic expansion and/or outside acquisition. The Immersive technology industry is an early-stage technology industry with nascent markets.
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QReal, LLC : Creation of lifelike photorealistic 3D interactive digital models and experiences in AR. 6.
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We do not currently target direct-to-consumer (“B2C’) customers, we focus primarily on the business-to-business (“B2B”) and business-to-business-to-consumer (“B2B2C”) segments. In addition, we are hardware agnostic. 4 The Glimpse Platform We develop, commercialize and market innovative and proprietary Immersive technology software products, solutions and intellectual property (“IP”).
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Glimpse Group Yazilim ve ARGE Ticaret Anonim Sirketi (“Glimpse Turkey”) : a development center in Turkey, primarily developing and creating 3D models for QReal. 5 Key Business Developments During Fiscal Year 2024 Securities Purchase Agreement (“SPA”) On September 28, 2023, the Company entered into a SPA with certain institutional investors to sell 1,885,715 shares of common stock for approximately $3.30 million (at $1.75 per share).
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By offering technologies and solutions in various industry segments, we aim to reduce dependency on any one single subsidiary company, technology or industry segment. We believe that three core tenets enhance our probability of success: (1) our ecosystem of Immersive technology companies, (2) diversification and (3) profitable growth.
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The Company received the subscription receivable on October 3, 2023 which resulted in net proceeds (after placement agent fees, professional fees and listing expenses) of $2.98 million. The SPA shares were issued on October 3, 2023.
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(1) Our ecosystem of Immersive technology software and service companies provides significant benefits to each subsidiary company and our group as a whole.
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Simultaneously, the exercise price on warrants to purchase 750,000 shares of common stock originally issued pursuant to a SPA entered into in November 2021 were repriced from $14.63 per share to $1.75 per share.
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We believe that the most notable benefits are: (a) economies of scale, cost efficiencies and reduced redundancies; (b) cross company collaboration, deep domain expertise, IP and knowledge transfer; (c) superior product offerings; (d) faster time to market; (e) enhanced business development and sales synergies; and (f) multiple monetization paths.
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Nasdaq Listing Qualification Notice On September 3, 2024, the Company received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for the prior 30 consecutive business days, the Company no longer meets the minimum bid price requirement for continued listing on the Nasdaq Capital Market.
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In an emerging industry that is lacking in infrastructure, we believe that our ecosystem provides a distinct competitive advantage relative to a single, standalone company in the industry. (2) By design, we incorporate multiple aspects of diversity to reduce the risks associated with an early stage industry, create multiple monetization venues and improve the probabilities of success.
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In accordance with Nasdaq Marketplace rules, the Company has a period of 180 calendar days from September 3, 2024, or until March 3, 2025, to regain compliance with the Minimum Bid Price Requirement.
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There is no single point of failure or dependency.
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If at any time before March 3, 2025, the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide written notification that the Company has achieved compliance with the Minimum Bid Price Requirement.
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This is created through: (a) ownership of numerous wholly-owned subsidiary companies operating in different industry segments; (b) targeting large industries with clear Immersive technology use-cases; (c) developing and utilizing various technologies and IP; (d) expanding to different geographic technology centers in a hub model under our umbrella; and (e) across industries, having a wide array of customers and potential acquirers/investors.
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The Company’s receipt of the notification letter has no immediate effect on the listing of the Company’s shares, which will continue to trade uninterrupted on Nasdaq under the ticker “VRAR”. In addition, it does not affect the Company’s business, operations or reporting requirements with the Securities and Exchange Commission.
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(3) From our inception, we have balanced minimizing operational cash burn with capturing the growth opportunities in front of us.
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In order to regain compliance with the Minimum Bid Price Requirements, the Company and its Board of Directors are reviewing various potential measures. The Company is not considering a reverse stock split at this time. See 8-K filed on September 9, 2024 for additional information.
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This remains an important factor driving our strategy to: (a) focus on enterprise software and services, only onboarding companies that are generating revenues or clearly could in the short term; (b) target solutions that are based on use cases that have a clear return on investment (“ROI”) and can be effectively developed from existing technologies and hardware; and (c) centralize costs to reduce inefficiencies.
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The Immersive Technology Markets Virtual Reality (VR) fully immerses the user in a digital environment via a head mounted display (“HMD”), where the user is blocked out of their immediate physical environment.
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Thus, there is benefit to them not only when their subsidiary company succeeds but also when any of the other subsidiaries succeeds, and when Glimpse as a whole succeeds. We believe that this ownership mechanism is a strong driver of cross-pollination of ideas and fosters collaboration.
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Advances in AI technologies are expanding the Immersive technology space, enabling capabilities in massive data computing, digital twin creation, complex simulations, life like and intelligent interfaces and experiences and more.
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While each subsidiary company owns its own IP, our parent company currently owns 100% of each subsidiary company.
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Therefore, in order to reach mass adoption, it is imperative in our view that the core computing move from the headset to the cloud and then transmitted back to the headset via 5G/broadband, allowing for a smaller/lighter form factor of the headset and more impactful applications.
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In addition, there will be perpetual licensing agreements between our subsidiary companies, so that if a subsidiary company is divested, then the remaining subsidiaries, if utilizing the IP of a divested subsidiary company, will continue to retain usage rights post-divestiture. 5 We currently own and operate numerous subsidiary companies (“Subsidiary Companies”, “Subsidiaries”) operating under the following business names as represented in the organizational chart below: Active Glimpse Subsidiary Companies 1.
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As part of our strategic shift to Spatial Core, Glimpse is focuses on providing the middleware enabling this transition. Immersive Technology Software (“Software”): In contrast to Hardware, Software is highly fragmented with hundreds of Software companies targeting different segments and solutions. Many are consumer oriented, whereas we are entirely enterprise focused (B2B and B2B2C).
Removed
Glimpse Group Yazilim ve ARGE Ticaret Anonim Sirketi (Glimpse Turkey): a development center in Turkey, primarily developing and creating 3D models for QReal 5. XR Terra, LLC (dba XR Terra) : Immersive technologies teaching courses and training 6. Sector 5 Digital, LLC (S5D) : Corporate immersive experiences and events 7.
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Issued Patents Name Entity Filing Date*Patent # US Patent # SIMULATED REALITY CROSS PLATFORM SYSTEM Foretell Studios, LLC 4/23/2020 16/857,015 MARKER-BASED POSITIONING OF SIMULATED REALITY Sector 5 Digital LLC 4/23/2020 16/856,916 AUGMENTED REALITY GEOLOCATION USING IMAGE MATCHING Sector 5 Digital LLC 8/22/2018 16/108,830 INTERACTIVE MIXED REALITY SYSTEM FOR A REAL-WORLD EVENT The Glimpse Group, Inc. 6/21/2018 16/014,956 SYSTEM FOR SHARING USER-GENERATED CONTENT The Glimpse Group, Inc. 6/12/2019 16/439,280 IMMERSIVE DISPLAY SYSTEM WITH ADJUSTABLE PERSPECTIVE The Glimpse Group, Inc. 11/27/2018 16/201,863 SIMULATED REALITY TRANSITION ELEMENT LOCATION The Glimpse Group, Inc. 6/15/2020 16/901,830 SIMULATED REALITY ADAPTIVE USER SPACE Foretell Studios, LLC 7/27/2020 16/939,504 IMMERSIVE ECOSYSTEM Brightline Interactive, LLC 6/4/2024 12/002,180 SYSTEM AND METHOD FOR GENERATING AN AUGMENTED REALITY EXPERIENCE Brightline Interactive, LLC 11/19/2020 16/953,264 * Each of the patents listed above expires 20 years from its filing date.
Removed
PulpoAR, LLC (PulpoAR): AR try-on technologies, targeting the Beauty and Cosmetics industry; a subsidiary company of QReal 8.
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Of these, 56 are based in the United States and 56 are based in Turkey. Corporate Information Our website is www.theglimpsegroup.com .
Removed
Brightline Interactive, LLC (BLI): Immersive and interactive experiences, training scenarios, and simulations for both government and commercial customers. 6 Key Business Developments During Fiscal Year 2023 Brightline Interactive, LLC Acquisition In May 2022, the Company entered into an Agreement and Plan of Merger (the “BLI Agreement”) to purchase all of the membership interests of Brightline Interactive, LLC (“BLI”), an immersive technology company that provides VR and AR based training scenarios and simulations for commercial and government customers.
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We have included our website address in this Report solely as an inactive textual reference. 9
Removed
The transaction’s total potential purchase price is $32.5 million, with an initial payment of $8.0 million upon closing, consisting of $3.0 million in cash and approximately 0.71 million shares of the Company’s common stock valued at $5.0 million at the time the Agreement was entered (and issued at closing based on a common stock floor price of $7.00/share).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Biggest changeAs such, we are eligible to take, have taken, and intend to take, advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. 22 In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
The evolving nature of such threats, in light of new and sophisticated methods used by criminals and cyberterrorists, including computer viruses, malware, phishing, misrepresentation, social engineering and forgery, is making it increasingly challenging to anticipate and adequately mitigate these risks. We may be subject to these types of attacks.
The evolving nature of such threats, in light of new and sophisticated methods used by criminals and cyberterrorists, including computer viruses, malware, phishing, misrepresentation, social engineering and forgery, is making it increasingly challenging to anticipate and adequately mitigate these risks. 15 We may be subject to these types of attacks.
As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors.
As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors.
We have incurred significant net losses since inception and anticipate that we will continue to incur net losses for the foreseeable future and may never achieve or maintain profitability. There is doubt about our ability to continue as a going concern. Since inception, we have incurred significant net losses.
We have incurred significant net losses since inception and anticipate that we will continue to incur net losses for the foreseeable future and may never achieve or maintain profitability. There is also doubt about our ability to continue as a going concern. We have incurred significant net losses since inception.
If we require additional capital and are unsuccessful in raising that capital, we may not be able to continue our business operations and advance our growth initiatives, which could adversely impact our business, financial condition and results of operations. Our market is competitive and dynamic.
If we require additional capital and are unsuccessful in raising that capital, we may not be able to continue our business operations and advance our growth initiatives, which could adversely impact our business, financial condition and results of operations. 10 Our market is competitive and dynamic.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our common stock.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our common stock. 23
As a public company, we incur significant legal, accounting, insurance, investor relations and other expenses that we did not incur as a private company, which we expect to further increase after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Capital Market, and other applicable securities rules and regulations impose various requirements on public companies.
As a public company, we incur significant legal, accounting, insurance, investor relations and other expenses that we did not incur as a private company, which we expect to further increase after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations impose various requirements on public companies.
These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our results of operations, financial condition or business. 24
These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our results of operations, financial condition or business.
Acquisitions may involve a number of other risks, including: ● diversion of management’s attention from other subsidiaries; ● disruption to our ongoing business; ● failure to retain key acquired personnel; ● difficulties in integrating acquired operations, technologies, products, or personnel; ● unanticipated expenses, events, or circumstances; ● assumption of disclosed and undisclosed liabilities; and ● inappropriate valuation of the acquired in-process R&D, or the entire acquired business.
Acquisitions may involve a number of other risks, including: ● diversion of management’s attention from other of our entities ; ● disruption to our ongoing business; ● failure to retain key acquired personnel; ● difficulties in integrating acquired operations, technologies, products, or personnel; ● unanticipated expenses, events, or circumstances; ● assumption of disclosed and undisclosed liabilities; and ● inappropriate valuation of the acquired in-process R&D, or the entire acquired business.
If we are unable to avert these attacks and security breaches, we could be subject to significant legal and financial liabilities, our reputation would be harmed and we could sustain substantial revenue loss from lost sales and customer dissatisfaction. We may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks.
If we are unable to avert these attacks and security breaches, we could be subject to significant legal and financial liabilities, our reputation would be harmed and we could sustain substantial revenue loss from lost sales and customer dissatisfaction. We may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyberattacks.
However, this practice could make it difficult to coordinate procedures across our operations and presents certain risks, including the risk that we may be slower or less effective in our attempts to identify or react to problems affecting an important business issue, or that we would be slower to identify a misalignment between a subsidiary’s and our overall business strategy.
However, this practice could make it difficult to coordinate procedures across our operations and presents certain risks, including the risk that we may be slower or less effective in our attempts to identify or react to problems affecting an important business issue, or that we would be slower to identify a misalignment between an entity’s and our overall business strategy.
No assurance can be given that we will be successful in raising the required capital at reasonable cost and at the required times, or at all. Further equity financings may have a dilutive effect on shareholders and any debt financing, if available, may require restrictions to be placed on our future financing and operating activities.
No assurance can be given that we will be successful in raising the required capital at a reasonable cost and at the required times, or at all. Further equity financings may have a dilutive effect on stockholders and any debt financing, if available, may require restrictions to be placed on our future financing and operating activities.
Cyber-attacks may target us, our suppliers, customers or other participants, or the internet infrastructure on which we depend. Actual or anticipated attacks and risks may cause us to incur significantly higher costs, including costs to deploy additional personnel and network protection technologies, train employees, and engage third-party experts and consultants.
Cyberattacks may target us, our suppliers, customers or other participants, or the internet infrastructure on which we depend. Actual or anticipated attacks and risks may cause us to incur significantly higher costs, including costs to deploy additional personnel and network protection technologies, train employees, and engage third-party experts and consultants.
Some of these risks are out of our control. Successfully integrating any acquired subsidiary may be more difficult, costly or time-consuming than we anticipate, or we may not otherwise realize any of the anticipated benefits of such acquisition. Any of the foregoing could adversely affect our business, financial condition or results of operations.
Some of these risks are out of our control. Successfully integrating any acquired entity may be more difficult, costly or time-consuming than we anticipate, or we may not otherwise realize any of the anticipated benefits of such acquisition. Any of the foregoing could adversely affect our business, financial condition or results of operations.
We have never declared or paid any cash dividends on our capital stock, and, subject to the discretionary dividend policy described in Part II, Item 5 of this report, we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors.
We have never declared or paid any cash dividends on our capital stock, and, subject to the discretionary dividend policy described in Part II of this Report, we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors.
Litigation may be necessary to defend against such claims. Litigation of this type could result in substantial costs to us and divert our resources. We also depend on trade secret protection through confidentiality and license agreements with our employees, subsidiaries, licensees, licensors and others.
Litigation may be necessary to defend against such claims. Litigation of this type could result in substantial costs to us and divert our resources. We also depend on trade secret protection through confidentiality and license agreements with our employees, entities, licensees, licensors and others.
Our inability to develop products and services that are competitive in technology and price and that meet end-user needs could have a material adverse effect on our business, financial condition or results of operations. 14 Development schedules for technology products and services are inherently uncertain.
Our inability to develop products and services that are competitive in technology and price and that meet end-user needs could have a material adverse effect on our business, financial condition or results of operations. 12 Development schedules for technology products and services are inherently uncertain.
We anticipate our products and technologies will require ongoing research and development (“R&D”) and we may experience technical problems or delays and may not have the funds necessary to continue their development, which could lead our business to fail.
We anticipate our products and technologies will require ongoing research and development and we may experience technical problems or delays and may not have the funds necessary to continue their development, which could lead our business to fail.
A failure in our information technology, or IT, systems could cause interruptions in our services, undermine the responsiveness of our services, disrupt our business, damage our reputation and cause losses. Our IT systems support all phases of our operations, including finance, marketing, customer development and the business of customer support services.
A failure in our information technology systems could cause interruptions in our services, undermine the responsiveness of our services, disrupt our business, damage our reputation and cause losses. Our information technology systems support all phases of our operations, including finance, marketing, customer development and the business of customer support services.
Even though Glimpse’s ecosystem provides a centralized corporate structure and the potential for cross company collaboration synergies, each subsidiary company has its own business development, technology development, sales team and general manager.
Even though Glimpse’s ecosystem provides a centralized corporate structure and the potential for cross company collaboration synergies, each entity has its own business development, technology development, sales team and general manager.
We believe that our practice of placing significant decision making powers with each of our subsidiaries’ management is important to our successful growth and allows us to be responsive to opportunities and to our customers’ needs.
We believe that our practice of placing significant decision making powers with each of our entities’ management is important to our successful growth and allows us to be responsive to opportunities and to our customers’ needs.
In the future, we intend to continue to pursue acquisitions of assets, products or businesses that we believe are complementary to our existing business and/or to enhance our market position or expand our product portfolio.
In the future, we may continue to pursue acquisitions of assets, products or businesses that we believe are complementary to our existing business and/or to enhance our market position or expand our product portfolio.
Factors that could cause fluctuations in the trading price of our common stock include the following: ● actual or anticipated fluctuations in our financial condition or results of operations; ● variance in our financial performance from expectations of securities analysts; ● changes in the pricing of the solutions on our platforms; ● changes in our projected operating and financial results; ● changes in laws or regulations applicable to our platforms; ● announcements by us or our competitors of significant business developments, acquisitions or new offerings; ● sales of shares of our common stock by us or our shareholders; ● significant data breaches, disruptions to or other incidents involving our platforms; ● our involvement in litigation; ● conditions or developments affecting the AR and VR industries; ● future sales of our common stock by us or our stockholders, as well as the anticipation of lock-up releases; ● changes in senior management or key personnel; ● the trading volume of our common stock; ● changes in the anticipated future size and growth rate of our market; ● general economic and market conditions; and ● other events or factors, including those resulting from war, incidents of terrorism, global pandemics or responses to these events.
Factors that could cause fluctuations in the trading price of our common stock include the following: ● actual or anticipated fluctuations in our financial condition or results of operations; ● variance in our financial performance from expectations of securities analysts; ● changes in the pricing of the solutions on our platforms; ● changes in our projected operating and financial results; ● changes in laws or regulations applicable to our platforms; ● announcements by us or our competitors of significant business developments, acquisitions or new offerings; ● sales of shares of our common stock by us or our stockholders, the expectation of future sales of our common stock by us or our stockholders, and/or the anticipation of lock-up releases; ● significant data breaches, disruptions to or other incidents involving our platforms; ● our involvement in litigation; ● conditions or developments affecting the Immersive technology industries; ● changes in senior management or key personnel; ● the trading volume of our common stock; ● changes in the anticipated future size and growth rate of our market; ● general economic and market conditions; and ● other events or factors, including those resulting from war, incidents of terrorism, global pandemics or responses to these events.
Inconsistent implementation of corporate strategy and policies at the subsidiary level could materially and adversely affect our financial position, results of operations and cash flows and prospects.
Inconsistent implementation of corporate strategy and policies at the entity level could materially and adversely affect our financial position, results of operations and cash flows and prospects.
However, as technologies evolve, and the portfolio of the service providers with which the Company shares confidential information with grows, we could be exposed to increased risk of breaches in security and other illegal or fraudulent acts, including cyberattacks.
However, as technologies evolve, and the portfolio of the service providers with which we share confidential information with grows, we could be exposed to increased risk of breaches in security and other illegal or fraudulent acts, including cyberattacks.
If our existing subsidiary companies do not achieve sufficient levels of revenue and profits, we may be required to seek additional financing through the issuance of equity or debt securities or other arrangements to finance the operations of the business.
If our existing entities do not achieve sufficient levels of revenue and profits, we may be required to seek additional financing through the issuance of equity or debt securities or other arrangements to finance the operations of the business.
As a result, there may be US patent applications pending of which we are unaware that may be infringed by the use of our technology or a part thereof, thus substantially interfering with the future conduct of our business.
As a result, there may be U.S. patent applications pending of which we are unaware that may be infringed by the use of our technology or a part thereof, thus substantially interfering with the future conduct of our business.
Our inability to achieve any of these objectives could harm our business, financial condition and results of operations. 13 We have material customer concentration, with a limited number of customers accounting for a material portion of our 2023 revenues.
Our inability to achieve any of these objectives could harm our business, financial condition and results of operations. 11 We have material customer concentration, with a limited number of customers accounting for a material portion of our revenues.
If we attempt to raise capital in an offering of shares of our common stock, preferred stock, convertible securities or warrants, our then-existing stockholders’ interests will be diluted. Our success depends on our ability to anticipate technological changes and develop new and enhanced products and services.
If we raise capital in an offering of our common stock, preferred stock or securities convertible into our common stock, our then-existing stockholders’ interests will be diluted. Our success depends on our ability to anticipate technological changes and develop new and enhanced products and services.
Although we believe that the integration of our existing subsidiary companies has been a success, there is still continued risk that we may encounter difficulties related to continued integration of the existing subsidiary companies in the future. There is also the risk that the business development, sales team and general manager of a future acquired subsidiary are unsuccessful.
Although we believe that the integration of our existing entities has been a success, there is still continued risk that we may encounter difficulties related to continued integration of the existing entities in the future. There is also the risk that the business development, sales team and general manager of a future acquired entity are unsuccessful.
The operating results of an individual subsidiary may differ from those of another subsidiary for a variety of reasons, including market size, customer base, competitive landscape, regulatory requirements and economic conditions affecting a particular industry vertical. As a result, certain of our subsidiaries may experience higher or lower levels of profitability and growth than other subsidiaries.
The operating results of an underlying entity may differ from those of another entity for a variety of reasons, including market size, customer base, competitive landscape, regulatory requirements and economic conditions affecting a particular industry vertical. As a result, certain of our entities may experience higher or lower levels of profitability and growth than other entities.
Our revenues and operating results may fluctuate from quarter to quarter and from year to year due to a combination of factors, including, but not limited to: ● varying size, timing and contractual terms of orders for our products and services, which may delay the recognition of revenue; ● competitive conditions in the industry, including strategic initiatives by us or our competitors, new products or services, product or service announcements and changes in pricing policy by us or our competitors; ● market acceptance of our products and services; 15 ● our ability to maintain existing relationships and to create new relationships with customers and business partners; ● the discretionary nature of purchase and budget cycles of our customers and end-users; ● the length and variability of the sales cycles for our products; ● general weakening of the economy resulting in a decrease in the overall demand for our products and services or otherwise affecting the capital investment levels of businesses with respect to our products or services; ● timing of product development and new product initiatives; ● changes in customer mix; ● increases in the cost of, or limitations on, the availability of materials; ● changes in product mix; and ● increases in costs and expenses associated with the introduction of new products.
Our revenues and operating results may fluctuate from quarter to quarter and from year to year due to a combination of factors, including, but not limited to: ● varying size, timing and contractual terms of orders for our products and services, which may delay the recognition of revenue; ● competitive conditions in the industry, including strategic initiatives by us or our competitors, new products or services, product or service announcements and changes in pricing policy by us or our competitors; ● market acceptance of our products and services; ● our ability to maintain existing relationships and to create new relationships with customers and business partners; ● the discretionary nature of purchase and budget cycles of our customers and end-users; ● the length and variability of the sales cycles for our products; ● general weakening of the economy resulting in a decrease in the overall demand for our products and services or otherwise affecting the capital investment levels of businesses with respect to our products or services; ● timing of product development and new product initiatives; ● changes in customer mix; ● increases in the cost of, or limitations on, the availability of materials; ● changes in product mix; and ● increases in costs and expenses associated with the introduction of new products. 16 Further, the markets that we serve are volatile and subject to market shifts that we may be unable to anticipate.
Our R&D efforts are subject to the risks typically associated with the development of new products and technologies based on emerging and innovative technologies, including, for example, unexpected technical problems or the possible insufficiency of funds for completing development of these products or technologies.
Our research and development (“R&D”) efforts are subject to the risks typically associated with the development of new products and technologies based on emerging and innovative technologies, including, for example, unexpected technical problems or the possible insufficiency of funds for completing development of these products or technologies.
For the years ended June 30, 2023 and 2022, our five largest customers, accounted for approximately 59% and 66% of our revenues, respectively. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers.
For the fiscal years ended June 30, 2024 and 2023, our five largest customers accounted for approximately 53% and 59% of our revenues, respectively. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers.
In addition, we may have to participate in interference or reexamination proceedings before the US Patent and Trademark Office, or in opposition, nullification or other proceedings before foreign patent offices, with respect to our patents or patent applications.
In addition, we may have to participate in interference or reexamination proceedings before the USPTO, or in opposition, nullification or other proceedings before foreign patent offices, with respect to our patents or patent applications.
Our primary business strategy is to: 1) generate and increase revenues of existing subsidiary companies and 2) to further enhance our presence in the Immersive technology market through the acquisition of additional companies, technologies, or intellectual property.
Our primary business strategy is to (i) generate and increase revenues of our existing entities and (ii) to further enhance our presence in the Immersive technology market through the acquisition of additional companies, technologies, or intellectual property.
We place significant decision making powers with our subsidiaries’ management, which presents certain risks that may cause the operating results of individual subsidiaries to vary.
We place significant decision making powers with our underlying entities’ management, which presents certain risks that may cause the operating results of individual entities to vary.
In that case, our ability to effectively market and sell our products and services could suffer, which could harm our business. RISKS RELATED TO OUR SECURITIES AND OTHER RISKS Our stock price may be volatile, and the value of our common stock may decline. We cannot predict the prices at which our common stock will trade.
In that case, our ability to effectively market and sell our products and services could suffer, which could harm our business. 20 Risks Related to Our Securities and Other Risks Our stock price may be volatile, and the value of our common stock may decline. Our stock price may be volatile.
We may also need to modify our pricing model to attract and retain such customers. If we fail to attract new customers or fail to maintain or expand existing relationships in a cost-effective manner, our business and future prospects may be materially and adversely impacted.
If we fail to attract new customers or fail to maintain or expand existing relationships in a cost-effective manner, our business and future prospects may be materially and adversely impacted.
We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment. 21 We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
We have made a number of acquisitions in the past and we intend to make more acquisitions in the future. Our ability to identify complementary assets, products or businesses for acquisition and successfully integrate them could affect our business, financial condition and operating results.
We may make more acquisitions in the future. Our ability to identify complementary assets, products or businesses for acquisition and successfully integrate them could affect our business, financial condition and operating results.
If we fail to deliver timely releases of our products that are ready for commercial use, release a new version, service, tool or update with material errors, or are unable to enhance our platforms to keep pace with rapid technological and regulatory changes or respond to new offerings by our competitors, or if new technologies emerge that are able to deliver competitive solutions at lower prices, more efficiently, more conveniently or more securely than our solutions, or if new operating systems, gaming platforms or devices are developed and we are unable to support our customers’ deployment of games and other applications onto those systems, platforms or devices, our business, financial condition and results of operations could be adversely affected. 18 We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
If we fail to deliver timely releases of our products that are ready for commercial use, release a new version, service, tool or update with material errors, or are unable to enhance our platforms to keep pace with rapid technological and regulatory changes or respond to new offerings by our competitors, or if new technologies emerge that are able to deliver competitive solutions at lower prices, more efficiently, more conveniently or more securely than our solutions, or if new operating systems, gaming platforms or devices are developed and we are unable to support our customers’ deployment of games and other applications onto those systems, platforms or devices, our business, financial condition and results of operations could be adversely affected.
We provide a variety of training and support services to our customers, and we believe we will need to continue to maintain and enhance the breadth and effectiveness of our training and support services as the scope and complexity of our platforms increase.
In order to get full use of our platforms, users may require need training. We provide a variety of training and support services to our customers, and we believe we will need to continue to maintain and enhance the breadth and effectiveness of our training and support services as the scope and complexity of our platforms increase.
The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting.
These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting.
Complying with these reporting and other regulatory requirements is time-consuming and results in increased costs to us and could have a negative effect on our results of operations, financial condition or business.
Complying with these reporting and other regulatory requirements is time-consuming and results in increased costs to us and could have a negative effect on our results of operations, financial condition or business. As a public company, we are subject to the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act.
We have experienced, and may in the future experience, disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of customers accessing our platforms simultaneously, denial of service attacks or other security-related incidents. 17 It may become increasingly difficult to maintain and improve our performance, especially during peak usage times and as our customer base grows and our platforms becomes more complex.
We have experienced, and may in the future experience, disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of customers accessing our platforms simultaneously, denial of service attacks or other security-related incidents.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
Potential pricing pressure could result in significant price erosion, reduced profit margins and loss of market share, any of which could have a material adverse effect on our business, results of operations, financial position and liquidity. Our plans for growth will place significant demands upon our resources.
Potential pricing pressure could result in significant price erosion, reduced profit margins and loss of market share, any of which could have a material adverse effect on our business, results of operations, financial position and liquidity. Competitive pricing pressure may reduce our gross profits and adversely affect our financial results.
If we need additional funding for operations and we are unable to raise it, we may not be able to continue our business operations. We expect our capital needs to increase in the future as we continue to expand and enhance our operations.
We may not be successful in raising additional capital necessary to meet expected funding needs. If we need additional funding for operations and we are unable to raise it, we may not be able to continue our business operations. We expect our capital needs to continue in order to maintain and expand our operations.
The combination of operating losses, cash expected to be used to continue operating activities and uncertain conditions relating to additional capital raises and continued revenue growth creates an uncertainty about the Company’s ability to continue as a going concern.
The combination of operating losses, cash expected to be used to continue operating activities and uncertain conditions relating to additional capital raises and continued revenue growth creates an uncertainty about our ability to continue as a going concern. If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment in us.
If we fail to timely release updates and new features to our platforms and adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or changing customer needs, requirements or preferences, our platforms may become less competitive.
Moreover, the harm to our reputation and legal liability related to such defects or errors may be substantial and could significantly harm our business. 14 If we fail to timely release updates and new features to our platforms and adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or changing customer needs, requirements or preferences, our platforms may become less competitive.
The value of our software and services is dependent on our ability to secure and maintain appropriate patent and other intellectual property rights protection. We intend to continue to pursue additional patent protection for our new software and technology.
Risks Related to Our Intellectual Property If we cannot obtain and maintain appropriate patent and other intellectual property rights protection for our technology, our business will suffer. The value of our software and services is dependent on our ability to secure and maintain appropriate patent and other intellectual property rights protection.
Our management and other personnel devotes a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly. An active trading market for our securities may not exist, which would adversely affect the liquidity and price of our securities.
Our management and other personnel devotes a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.
If management’s assumptions prove to be incorrect, it could have a material adverse effect on our business, financial condition or results of operations. Our centralized management will have significant discretion over directing our resources and if management does not allocate resources effectively, our business, financial condition or result of operations could be harmed.
Our centralized management will have significant discretion over directing our resources and if management does not allocate resources effectively, our business, financial condition or result of operations could be harmed. Our centralized management has significant discretion over directing our resources to any and all of our entities.
Any patent or trademark owned by us may be challenged and invalidated or circumvented. Patents may not be issued from any of our pending or future patent applications.
Patents may not be issued from any of our pending or future patent applications.
Any necessity to procure rights to the third party technology might cause us to negotiate the royalty terms of the third party license which could increase our cost of production or, in certain cases, terminate our ability to build some of our products entirely. 22 Our failure to renew, register or otherwise protect our trademarks could have a negative impact on the value of our brand names and our ability to use those names in certain geographical areas.
Any necessity to procure rights to the third party technology might cause us to negotiate the royalty terms of the third party license which could increase our cost of production or, in certain cases, terminate our ability to build some of our products entirely.
As such, we are subject to the risks associated with being an early stage company operating in an emerging industry, including, but not limited to, the risks set forth herein.
We were incorporated in June 2016 and are an early stage technology development company, comprised of a wholly-owned group of early stage entities in Immersive technology space. As such, we are subject to the risks associated with being an early stage company operating in an emerging industry, including, but not limited to, the risks set forth herein.
As of June 30, 2023 and June 30, 2022, we had an accumulated deficit of approximately $56.6 million and $28.1 million respectively. The net loss for the fiscal year ended June 30, 2023 was approximately $28.6 million and fiscal year ended June 30, 2022 was approximately $6.0 million.
For the fiscal years ended June 30, 2024 and 2023, we incurred a net loss of $6.39 million and $28.6 million, respectively. As of June 30, 2024, we had an accumulated deficit of $63 million.
In addition, if we proceed with an acquisition, our available cash may be used to complete the transaction, diminishing our liquidity and capital resources, or shares may be issued which could cause significant dilution to existing shareholders. 20 RISKS RELATED TO OUR INTELLECTUAL PROPERTY If we cannot obtain and maintain appropriate patent and other intellectual property rights protection for our technology, our business will suffer.
In addition, if we proceed with an acquisition, our available cash may be used to complete the transaction, diminishing our liquidity and capital resources, or shares may be issued which could cause significant dilution to existing stockholders.
The market price and trading volume of our common stock may be heavily influenced by the way analysts interpret our financial information and other disclosures. We do not have control over these analysts. If few securities analysts commence coverage of us, or if industry analysts cease coverage of us, our stock price could be negatively affected.
We do not have control over these analysts. If few securities analysts commence coverage of us, or if industry analysts cease coverage of us, our stock price could be negatively affected.
We believe our copyrights and trademarks are integral to our success. We rely on trademark, copyright and other intellectual property laws to protect our proprietary rights. If we fail to properly register and otherwise protect our trademarks, service marks and copyrights, we may lose our rights, or our exclusive rights, to them.
If we fail to properly register and otherwise protect our trademarks, service marks and copyrights, we may lose our rights, or our exclusive rights, to them.
To date, we have devoted our efforts towards securing financing, building and evolving our technology platform and creating an infrastructure that allows for the growth of such technology platform. We expect to continue to incur significant expenses and potential operating losses for the foreseeable future.
To date, we have devoted our efforts towards securing financing, building and evolving our technology platform and creating an infrastructure that allows for the growth of such technology platform. While the Company’s cash flow has improved in recent months, we may continue to generate negative cash flow for the foreseeable future.
Our centralized management has significant discretion over directing our resources to any and all of our subsidiary companies. As a consequence, it is possible that one or more of our subsidiary companies will not receive adequate capital or management resources.
As a consequence, it is possible that one or more of our entities will not receive adequate capital or management resources.
Competition continues to increase in the market segments in which we operate, and we expect competition to further increase in the future. Our future growth depends on our ability to attract, retain customers, and the loss of existing customers, or failure to attract new ones, could adversely impact our business and future prospects.
Our future growth depends on our ability to attract and retain customers, and the loss of existing customers, or failure to attract new ones, could adversely impact our business and future prospects. The size of our community of customers on our platforms is critical to our success.
Litigation of this type could result in substantial costs and diversion of resources, may result in counterclaims or other claims against us and could significantly harm our results of operations.
Litigation of this type could result in substantial costs and diversion of resources, may result in counterclaims or other claims against us and could significantly harm our results of operations. In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the United States.
In addition, if our reputation is damaged due to a data security breach, our ability to attract new engagements and clients may be impaired or we may be subjected to damages or penalties, which could negatively impact our businesses, financial results or financial condition. 19 RISKS RELATED TO OUR ACQUISITION STRATEGY We may be unable to obtain additional financing, if required, to fund the existing operations of the business, complete future acquisitions or to fund the development and commercialization of the companies, technologies, or intellectual property.
In addition, if our reputation is damaged due to a data security breach, our ability to attract new engagements and clients may be impaired or we may be subjected to damages or penalties, which could negatively impact our businesses, financial results or financial condition.
If we are unsuccessful in achieving our plan for growth, our business could be harmed. We are actively marketing our products domestically and internationally. The plan places significant demands upon managerial, financial, and human resources.
Competition continues to increase in the market segments in which we operate, and we expect competition to further increase in the future. Our plans for growth will place significant demands upon our resources. If we are unsuccessful in achieving our plan for growth, our business could be harmed. We are actively marketing our products domestically and internationally.
Moreover, we have not obtained patent protection for our technology in all foreign countries in which our products might be sold. In any event, the patent laws and enforcement regimes of other countries may differ from those of the United States as to the patentability of our personal display and related technologies and the degree of protection afforded.
In any event, the patent laws and enforcement regimes of other countries may differ from those of the United States as to the patentability of our personal display and related technologies and the degree of protection afforded. 18 Any patent or trademark owned by us may be challenged and invalidated or circumvented.
If we fail to integrate any existing or acquired subsidiaries into the Glimpse ecosystem, we may not realize the anticipated benefits of the collaborative Glimpse ecosystem and the integration of any acquisitions, which could harm our business, financial condition or results of operations.
To the extent that additional financing proves to be unavailable, that fact will likely have a negative impact on our business and we may be compelled to restructure the operations of the business or abandon a particular contemplated business combination. 17 If we fail to integrate any existing or acquired entities into the Glimpse ecosystem, we may not realize the anticipated benefits of the collaborative Glimpse ecosystem and the integration of any acquisitions, which could harm our business, financial condition or results of operations.
If a subsidiary company does not receive adequate capital or resources, it may not be able to commercialize its products and services, or if its products and services are already commercialized, it may not be able to keep such products and services competitive.
If an entity does not receive adequate capital or resources, it may not be able to commercialize its products and services, or if its products and services are already commercialized, it may not be able to keep such products and services competitive. Therefore, if we don’t allocate resources effectively, our business, financial condition or result of operations could be harmed.
We may not have agreements containing adequate protective provisions in every case, and the contractual provisions that are in place may not provide us with adequate protection in all circumstances. The unauthorized reproduction or other misappropriation of our intellectual property could diminish the value of our brand, competitive advantages or goodwill and result in decreased sales.
We may not have agreements containing adequate protective provisions in every case, and the contractual provisions that are in place may not provide us with adequate protection in all circumstances.
If we do not make our platforms, including new versions or technology advancements, easier to use or properly train customers on how to use our platforms, our ability to broaden the appeal of our products and services and to increase our revenue could suffer. In order to get full use of our platforms, users generally need training.
Any of these events could damage our reputation, resulting in fewer users actively using our platforms, disrupt our operations, and subject us to liability, which could adversely affect our business, financial condition, and operating results. 13 If we do not make our platforms, including new versions or technology advancements, easier to use or properly train customers on how to use our platforms, our ability to broaden the appeal of our products and services and to increase our revenue could suffer.
We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of our initial public offering; (2) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates.
We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year during which we have total annual gross revenues of at least $1.235 billion, (ii) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering, (iii) the date on which we have, during the preceding three year period, issued more than $1.0 billion in non-convertible debt, or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which could occur if the market value of our common shares that are held by non-affiliates is $700 million or more as of the last business day of our most recently completed second fiscal quarter.
Once the platform is further developed, the size of our community of customers on our platforms is critical to our success. Our ability to achieve profitability in the future will depend, in large part, on our ability to add new customers, while retaining and even expanding offerings to existing customers.
Our ability to achieve profitability in the future will depend, in large part, on our ability to add new customers, while retaining and even expanding offerings to existing customers. Our customers can generally decide to cease using our solutions at any time.
We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management’s attention. 23 If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our common stock could decline.
If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our common stock could decline. The market price and trading volume of our common stock may be heavily influenced by the way analysts interpret our financial information and other disclosures.
We may incur substantial costs or lose important rights as a result of litigation or other proceedings relating to our products, patents and other intellectual property rights. In recent years, there has been significant litigation involving patents and other intellectual property rights in many technology-related industries.
The unauthorized reproduction or other misappropriation of our intellectual property could diminish the value of our brand, competitive advantages or goodwill and result in decreased sales. 19 We may incur substantial costs or lose important rights as a result of litigation or other proceedings relating to our products, patents and other intellectual property rights.
Further, the markets that we serve are volatile and subject to market shifts that we may be unable to anticipate. A slowdown in the demand for AR or VR products and services can have a significant adverse effect on the demand for our products and services in any given period.
A slowdown in the demand for Immersive technology products and services can have a significant adverse effect on the demand for our products and services in any given period.
In addition, it is possible that a recurrence of COVID-19 or a like kind pandemic occurrence may have a deleterious effect on our customer growth in the future. Achieving growth in our customer base may require us to engage in increasingly sophisticated and costly sales and marketing efforts that may not result in additional customers.
Achieving growth in our customer base may require us to engage in increasingly sophisticated and costly sales and marketing efforts that may not result in additional customers. We may also need to modify our pricing model to attract and retain such customers.
In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the United States. 21 As is commonplace in technology companies, we employ individuals who were previously employed at other technology companies.
As is commonplace in technology companies, we employ individuals who were previously employed at other technology companies.
Until recently, patent applications were retained in secrecy by the US Patent and Trademark Office until and unless a patent was issued.
In recent years, there has been significant litigation involving patents and other intellectual property rights in many technology-related industries. Until recently, patent applications were retained in secrecy by the USPTO until and unless a patent was issued.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We are based in New York, New York. Our current facilities are leased and adequate to meet our ongoing needs. If we require additional space or expand geographically, we may seek additional facilities on commercially reasonable terms at such time. We lease other office space in Fort Worth, Texas, and Ashburn, Virginia.
Biggest changeOur current facilities are leased and adequate to meet our current and ongoing needs. If we require additional space or expand geographically, we may seek additional facilities on commercially reasonable terms at such time.
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We also lease several small offices in Turkey for the operations of Glimpse Turkey.
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ITEM 2. PROPERTIES We are based in New York, New York, with a lease expiring on December 31, 2024. We have not yet determined whether we are going to renew this lease, and if so in what capacity. If we don’t renew the current lease, we may move to an alternative location or become fully remote for the NY office.
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We have a lease in Fort Worth, Texas for the operations of S5D, with a lease expiring on February 28, 2025 which we do not expect to renew. We also have a lease in Ashburn, Virginia for the operations of BLI. We also lease two offices in Turkey, for the operations of Glimpse Turkey.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities For the period April 1 to June 30, 2023: Number of Shares Cash Proceeds Value of Shares Exercise of options 345 $ - $ 1,553 Contingent acquisition obligation 285,714 - 1,184,285 Compensation and vendor expense 75,738 - 307,835 Total 361,797 $ - $ 1,493,673 Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. 26 Dividends We have never declared or paid cash dividends on our capital stock.
Biggest changeRecent Sales of Unregistered Securities Number of Shares Cash Proceeds Value of Shares Compensation and vendor expense 18,000 - $ 21,660 Purchases of Equity Securities by the Issuer and Affiliated Purchasers None Dividends We have never declared or paid cash dividends on our capital stock.
However, such distribution shall be subject to a determination by our Board of Directors that there exist no special circumstances that would prevent it from approving such distribution or the extent thereof.
However, such distribution shall be subject to a determination by our board of directors that there exist no special circumstances that would prevent it from approving such distribution or the extent thereof.
Although we currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, we are committed, subject to the limitations on distributions under Nevada law, to pay certain distributions in the event (i) we sell the business of any of our subsidiaries; or (ii) we report consolidated net income on our fiscal year end audited financial statements.
Although we currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, we are committed, subject to the limitations on distributions under Nevada law, to pay certain distributions in the event (i) we sell the business of any of our entities, or (ii) we report consolidated net income on our fiscal year end audited financial statements.
In the event we sell all or substantially all of the business of any of our subsidiaries, whether by means of a merger, asset sale, stock sale or otherwise, for a price in excess of $10,000,000, we may distribute no less than 85% of the after-tax net proceeds for such sale.
In the event we sell all or substantially all of the business of any of our entities, whether by means of a merger, asset sale, stock sale or otherwise, for a price in excess of $10,000,000, we may distribute no less than 85% of the after-tax net proceeds for such sale.
Such special circumstances could include, but not be limited to, the Board of Directors determining that such distribution, which could have otherwise been reinvested into our existing businesses, would impair our ability to execute on our business strategy.
Such special circumstances could include, but are not limited to, our board of directors determining that such distribution, which could have otherwise been reinvested into our existing businesses, would impair our ability to execute on our business strategy.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Information with Respect to our Common Stock Our common stock is traded on the Nasdaq Capital Market, LLC, or Nasdaq, and began trading on July 1, 2021 under the symbol “VRAR”.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Information with Respect to our Common Stock Our common stock is traded on the Nasdaq Capital Market under the symbol “VRAR” and began trading on such exchange on July 1, 2021.
Such special circumstances could include, but not be limited to, the Company or any of its subsidiary companies contemplating or actively being engaged in a prospective acquisition or acquisitions that may require the use of such net proceeds, or other uses integral to the operations, growth or business development of any existing subsidiary company.
Such special circumstances could include, but are not limited to, the Company or any of its underlying entities contemplating or actively being engaged in a prospective acquisition or acquisitions that may require the use of such net proceeds, or other uses integral to the operations, growth or business development of any existing underlying entity.
Subject to the distribution intentions discussed above, any future determination regarding the declaration and payment of dividends, if any, will be subject to the limitations on distributions under Nevada law, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.
Moreover, such distribution may be waived, in writing, by the holders of a majority of our securities holders entitled to vote, voting together as a single class. 26 Subject to the distribution intentions discussed above, any future determination regarding the declaration and payment of dividends, if any, will be subject to the limitations on distributions under Nevada law, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.
Holders of Record Our common stock is listed on the NASDAQ under the ticker symbol “VRAR.” As of September 22, 2023, we had 122 holders of record of our common stock based upon the records of our transfer agent, which do not include beneficial owners of common stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.
Holders of Record As of September 27, 2024, we had 115 holders of record of our common stock based upon the records of our transfer agent, which do not include beneficial owners of common stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.
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Moreover, such distribution may be waived, in writing, by the holders of a majority of our securities holders entitled to vote, voting together as a single class.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeEmerging Growth Company Status We are an “emerging growth company”, as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Biggest changeAs such, we are eligible to take, have taken, and intend to take, advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. 37 In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
The Company reviews intangibles, being amortized, for impairment when current events indicate that the fair value may be less than the carrying value. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for under the acquisition method.
The Company reviews intangibles, being amortized, for impairment when current events indicate that the fair value may be less than the carrying value. 28 Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for under the acquisition method.
The budget is reviewed periodically and percentage of completion adjusted accordingly. Revenue for Software Services consulting services and website maintenance is recognized when the Company performs the services, typically on a monthly retainer basis. Revenue for Software License is recognized at the point of time in which the Company delivers the software and customer accepts delivery.
The budget is reviewed periodically and percentage of completion adjusted accordingly. 30 Revenue for Software Services consulting services and website maintenance is recognized when the Company performs the services, typically on a monthly retainer basis. Revenue for Software License is recognized at the point of time in which the Company delivers the software and customer accepts delivery.
Outside of potential revenue growth generated by the Company, in order to alleviate the going concern the Company may take actions which could include but are not limited to: further cost reductions, equity or debt financings and restructuring of potential future cash contingent acquisition liabilities. There is no assurance that these actions will be taken or be successful if pursued.
Outside of potential revenue growth generated by the Company, in order to restore the going concern the Company may take actions which could include but are not limited to, further cost reductions, equity or debt financings and restructuring of potential future cash contingent acquisition liabilities. There is no assurance that these actions will be taken or be successful if pursued.
Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP. Our management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We believe that both management and shareholders benefit from referring to the following non-GAAP financial measures in planning, forecasting and analyzing future periods.
Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP. Our management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We believe that both management and stockholders benefit from referring to the following non-GAAP financial measures in planning, forecasting and analyzing future periods.
While our significant accounting policies are more fully described in our financial statements, we believe the following accounting policies are the most critical to aid in fully understanding and evaluating this management discussion and analysis. Principles of Consolidation The consolidated financial statements include the balances of Glimpse and its wholly owned subsidiaries.
While our significant accounting policies are more fully described in our financial statements, we believe the following accounting policies are the most critical to aid in fully understanding and evaluating this management discussion and analysis. Principles of Consolidation The consolidated financial statements include the balances of Glimpse and its wholly owned entities.
This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. The Company has incurred recurring losses since its inception, including a net loss of $28.6 million for the year ended June 30, 2023.
This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. The Company has incurred recurring losses since its inception, including a net loss of $6.39 million for the year ended June 30, 2024.
Contingent consideration is recorded within contingent consideration, current, and contingent consideration, non-current, in the Company’s consolidated balance sheets as of June 30, 2023 and 2022.
Contingent consideration is recorded within contingent consideration, current, and contingent consideration, non-current, in the Company’s consolidated balance sheets as of June 30, 2024 and 2023.
References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors.
References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we”, “our” and similar terms refer to the Company. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks, uncertainties and other factors.
Actual results could differ from those estimates. 28 The principal estimates relate to the valuation of allowance for doubtful accounts, stock options, warrants, revenue recognition, cost of goods sold, allocation of the purchase price of assets relating to business combinations, calculation of contingent consideration for acquisitions and fair value of intangible assets.
Actual results could differ from those estimates. The principal estimates relate to the valuation of allowance for doubtful accounts, stock options, warrants, revenue recognition, allocation of the purchase price of assets relating to business combinations, calculation of contingent consideration for acquisitions and fair value of intangible assets and impairment of non-current assets.
Change in Fair Value of Acquisition Contingent Consideration Change in fair value of acquisition contingent consideration for the year ended June 30, 2023 was a gain of approximately $0.70 million compared to a gain $1.86 million for the year ended June 30, 2022.
Change in Fair Value of Acquisition Contingent Consideration Change in fair value of acquisition contingent consideration for the year ended June 30, 2024 was a gain of approximately $4.27 million compared to a gain of approximately $0.70 million for the year ended June 30, 2023.
Significant Judgments The Company’s contracts with customers may include promises to transfer multiple products/services. Determining whether products/services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Further, judgment may be required to determine the standalone selling price for each distinct performance obligation.
Determining whether products/services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Further, judgment may be required to determine the standalone selling price for each distinct performance obligation.
Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding GAAP measures provided by each company under applicable SEC rules. 37 The following table presents a reconciliation of net loss to Adjusted EBITDA loss for the years ended June 30, 2023 and 2022: For the Years Ended June 30, 2023 2022 (in millions) Net loss $ (28.56 ) $ (5.97 ) Depreciation and amortization 2.19 0.54 EBITDA loss (26.37 ) (5.43 ) Stock based compensation expenses 4.98 3.08 Change in fair value of acquisition contingent consideration (0.70 ) (1.86 ) Intangible asset impairment 15.35 - Acquisition related expenses 0.28 0.58 Stock based financing related expenses - 0.28 Forgiveness of PPP loan - (0.62 ) Adjusted EBITDA loss $ (6.46 ) $ (3.97 ) Adjusted EBITDA loss for year ended June 30, 2023 was $6.46 million compared to $3.97 million for the comparable 2022 period.
Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding GAAP measures provided by each company under applicable SEC rules. 35 The following table presents a reconciliation of net loss to Adjusted EBITDA loss for the years ended June 30, 2024 and 2023: For the Years Ended June 30, 2024 2023 (in millions) Net loss $ (6.39 ) $ (28.56 ) Depreciation and amortization 1.36 2.19 EBITDA loss (5.03 ) (26.37 ) Stock based compensation expenses 2.28 4.98 Change in fair value of acquisition contingent consideration (4.27 ) (0.70 ) Intangible asset impairment 2.94 15.35 Change in fair value of accrued performance bonus (0.55 ) - Acquisition related expenses - 0.28 Adjusted EBITDA loss $ (4.63 ) $ (6.46 ) Adjusted EBITDA loss for the year ended June 30, 2024 was $4.63 million compared to $6.46 million for the comparable 2023 period.
Intangible assets (other than Goodwill) Intangible assets represent the allocation of a portion of an acquisition’s purchase price. They include acquired customer relationships and developed technology purchased. Intangible assets are stated at allocated cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the related assets.
They include acquired customer relationships and developed technology purchased. Intangible assets are stated at allocated cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the related assets.
Going Concern The Company evaluated whether there are conditions and events, considered in the aggregate, that raise doubt about its ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
The improvement in EBITDA loss was driven by reductions in cash operating expenses exceeding reduced revenue/gross profit. Going Concern The Company evaluated whether there are conditions and events, considered in the aggregate, that raise doubt about its ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
Disaggregation of Revenue The Company generated revenue for the years ended June 30, 2023 and 2022 by delivering: (i) Software Services, consisting primarily of VR/AR software projects, solutions and consulting services, and (ii) Software Licenses & SaaS, consisting primarily of VR and AR software licenses or SaaS. The Company currently generates its revenues primarily from customers in the United States.
Disaggregation of Revenue The Company generated revenue for the years ended June 30, 2024 and 2023 by delivering: (i) Software Services, consisting primarily of VR/AR/Spatial Computing software projects, solutions and consulting services, and (ii) Software Licenses & SaaS, consisting primarily of VR, AR and Spatial Computing software licenses or SaaS.
Our subsidiary companies currently target a wide array of industry verticals, including but not limited to: Corporate Training, Education, Healthcare, Government & Defense Branding/Marketing/Advertising, Retail, Financial Services, Food & Hospitality, Media & Entertainment, Architecture/Engineering/Construction (“AEC”), Corporate Events and Presentations, Beauty and Cosmetics, and Social VR support groups and therapy.
We currently target a wide array of industry verticals, including but not limited to: Corporate Training, Education, Healthcare, Government & Defense, Branding/Marketing/Advertising, Retail, Financial Services, Food & Hospitality, Media & Entertainment, Architecture/Engineering/Construction, Corporate Events and Presentations and Social VR support groups and therapy. We focus primarily on the business-to-business (“B2B”) and business-to-business-to-consumer (“B2B2C”) segments industry and we are hardware agnostic.
If the estimated future cash flows from the use of the asset are less than the carrying value, an impairment charge would be recorded to write down the asset to its estimated fair value. 29 Fair Value of Financial Instruments Fair value is defined 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.
Fair Value of Financial Instruments Fair value is defined 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.
The following discussion and analysis of the results of operations and financial condition of The Glimpse Group, Inc. and its wholly owned subsidiaries (collectively referred to as “Glimpse” or the “Company”) as of and for the years ended June 30, 2023 and 2022 should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial statements that are included elsewhere in this Annual Report.
The following discussion and analysis of the results of operations and financial condition of The Glimpse Group, Inc. and its underlying entities (collectively referred to as “Glimpse” or the “Company”) as of and for the fiscal years ended June 30, 2024 and 2023, should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial statements appearing elsewhere in this Report, as well as the other financial information we file with the SEC from time to time.
Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statement of operations. At times, the Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination.
Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statement of operations. At times, the Company engages the assistance of valuation specialists in determining fair values of assets acquired and liabilities assumed in a business combination. Intangible assets (other than Goodwill) Intangible assets represent the allocation of a portion of an acquisition’s purchase price.
A portion of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.
A portion of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Other contracts can include various services and products which are at times capable of being distinct, and therefore may be accounted for as separate performance obligations.
Highlights RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2023 AND 2022 Summary P&L For the Years Ended June 30, Change 2023 2022 $ % (in millions) Revenue $ 13.48 $ 7.27 $ 6.21 85 % Cost of Goods Sold 4.26 1.24 3.02 244 % Gross Profit 9.22 6.03 3.19 53 % Total Operating Expenses 38.02 12.37 25.65 207 % Loss from Operations before Other Income (Expense) (28.80 ) (6.34 ) (22.46 ) -354 % Other Income (Expense), net 0.24 0.37 (0.13 ) 35 % Net Loss $ (28.56 ) $ (5.97 ) $ (22.59 ) -378 % Revenue For the Years Ended June 30, Change 2023 2022 $ % (in millions) Software Services $ 12.59 $ 6.72 $ 5.87 87 % Software License/Software as a Service 0.89 0.55 0.34 62 % Total Revenue $ 13.48 $ 7.27 $ 6.21 85 % Total revenue for the year ended June 30, 2023 was approximately $13.48 million compared to approximately $7.27 million for the year ended June 30, 2022, an increase of approximately 85%.
Highlights RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2024 AND 2023 Summary P&L For the Years Ended June 30, Change 2024 2023 $ % (in millions) Revenue $ 8.80 $ 13.48 $ (4.68 ) -35 % Cost of Goods Sold 2.94 4.26 (1.32 ) -31 % Gross Profit 5.86 9.22 (3.36 ) -36 % Total Operating Expenses 12.47 38.02 (25.55 ) -67 % Loss from Operations before Other Income (6.61 ) (28.80 ) 22.19 77 % Other Income 0.22 0.24 (0.02 ) 8 % Net Loss $ (6.39 ) $ (28.56 ) $ 22.17 78 % Revenue For the Years Ended June 30, Change 2024 2023 $ % (in millions) Software Services $ 8.13 $ 12.59 $ (4.46 ) -35 % Software License/Software as a Service 0.67 0.89 (0.22 ) -25 % Total Revenue $ 8.80 $ 13.48 $ (4.68 ) -35 % Total revenue for the year ended June 30, 2024 was approximately $8.80 million compared to approximately $13.48 million for the year ended June 30, 2023, a decrease of approximately 35%.
The Company expects that its cash and cash equivalents as of June 30, 2023 may not be sufficient to fund operations for at least the next twelve months from the date of issuance of these consolidated financial statements and the Company will need to obtain additional funding.
While the Company intends to generate positive cash flow in the coming 12 months, its cash and cash equivalents as of June 30, 2024 may not be sufficient to fund operations for at least the next twelve months from the date of issuance of these consolidated financial statements.
If there are significant contractually stated ongoing service obligations to be performed during the term of the Software License or SaaS contract, then revenues are recognized ratably over the term of the contract. 31 Employee Stock-Based Compensation The Company recognizes stock-based compensation expense related to grants to employees or service providers based on grant date fair values of common stock or the stock options, which are amortized over the requisite period, as well as forfeitures as they occur.
Employee Stock-Based Compensation The Company recognizes stock-based compensation expense related to grants to employees or service providers based on grant date fair values of common stock or the stock options, which are amortized over the requisite period, as well as forfeitures as they occur.
We believe that we offer significant exposure to the rapidly growing and potentially transformative Immersive technology markets, while mitigating downside risk via our diversified model and ecosystem.
Glimpse’s operating entities are located primarily in the United States, with a development and modeling center in Turkey. We believe that we offer significant exposure to the rapidly growing and potentially transformative Immersive technology markets, while mitigating downside risk via our diversified model and ecosystem.
We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of our initial public offering; (ii) the first fiscal year after our annual gross revenues are $1.235 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of at least $1.235 billion, (ii) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering, (iii) the date on which we have, during the preceding three year period, issued more than $1.0 billion in non-convertible debt, or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which could occur if the market value of our common shares that are held by non-affiliates is $700 million or more as of the last business day of our most recently completed second fiscal quarter.
We believe that this industry has significant growth potential across verticals, may be transformative and that our diversified platform and ecosystem create important competitive advantages.
The Immersive technology industry is an early-stage technology industry with nascent markets. We believe that this industry has significant growth potential across verticals, may be transformative, and that our diversified ecosystem creates important competitive advantages.
The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance of a third-party valuation specialist.
The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance of a third-party valuation specialist. The Company’s other financial instruments consist primarily of accounts receivable, accounts payable and other liabilities, and approximate fair value due to the short-term nature of these instruments.
The Company applies the following steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: ● identify the contract with a customer; ● identify the performance obligations in the contract; ● determine the transaction price; ● allocate the transaction price to performance obligations in the contract; ● recognize revenue as the performance obligation is satisfied; ● determine that collection is reasonably assured.
Revenue Recognition Nature of Revenues The Company reports its revenues in two categories: ● Software Services: Virtual, Augmented Reality and Spatial Computing projects, solutions and consulting services. ● Software License and Software-as-a-Service (“SaaS”): Virtual Reality or Augmented Reality or Spatial Computing software that is sold either as a license or as a SaaS subscription. 29 The Company applies the following steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: ● identify the contract with a customer; ● identify the performance obligations in the contract; ● determine the transaction price; ● allocate the transaction price to performance obligations in the contract; ● recognize revenue as the performance obligation is satisfied; ● determine that collection is reasonably assured.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described. Potential liquidity resources Potential liquidity resources may include the sale of common stock pursuant to an existing effective registration statement on Form S-3.
Our platform of Immersive technology subsidiary companies, collaborative environment and diversified business model aims to simplify the challenges faced by companies in the emerging Immersive technology industry, potentially improving each subsidiary company’s ability to succeed, while simultaneously providing investors an opportunity to invest directly via a diversified infrastructure.
Our ecosystem of Immersive technology entities, collaborative environment and diversified business model aims to simplify the challenges faced by companies in the emerging Immersive technology industry, create scale, build operational efficiencies, reduce time to market and enhance go-to-market synergies, while simultaneously providing investors an opportunity to invest directly via a diversified infrastructure.
If an evaluation of recoverability is required, the estimated undiscounted future cash flows directly associated with the asset are compared with the asset’s carrying amount.
If an evaluation of recoverability is required, the estimated undiscounted future cash flows directly associated with the asset are compared with the asset’s carrying amount. If the estimated future cash flows from the use of the asset are less than the carrying value, an impairment charge would be recorded to write down the asset to its estimated fair value.
In addition, as of June 30, 2023, the Company had an accumulated deficit of $56.6 million. The Company expects to continue to generate negative cash flow for the foreseeable future.
In addition, as of June 30, 2024, the Company had an accumulated deficit of $63.0 million. While the Company’s cash flow has improved in recent months, we may continue to generate negative cash flow for the foreseeable future.
Contract assets include cash and equity based payroll costs, and may include payments to consultants and vendors. For distinct performance obligations recognized over time, the Company records a contract asset (costs in excess of billings) when revenue is recognized prior to invoicing, or a contract liability (billings in excess of costs) when revenue is recognized subsequent to invoicing.
For distinct performance obligations recognized over time, the Company records a contract asset (costs in excess of billings) when revenue is recognized prior to invoicing, or a contract liability (billings in excess of costs) when revenue is recognized subsequent to invoicing. Significant Judgments The Company’s contracts with customers may include promises to transfer multiple products/services.
Sales and Marketing Sales and marketing expenses (primarily representing headcount, including incentive based, related costs) for the year ended June 30, 2023 were approximately $7.49 million compared to $3.14 million for the year ended June 30, 2022, an increase of approximately 139%.
Sales and Marketing Sales and marketing expenses (primarily representing headcount, including incentive based, related costs) for the year ended June 30, 2024 were approximately $2.82 million compared to $7.49 million for the year ended June 30, 2023, a decrease of approximately 62%. The decrease reflects reduced headcount throughout the Company, driven by reduced revenue.
Liquidity and Capital Resources For the Years Ended June 30, Change 2023 2022 $ % (in millions) Net cash used in operating activities $ (9.16 ) $ (4.94 ) $ (4.22 ) -85 % Net cash used in investing activities (3.53 ) (5.06 ) 1.53 30 % Net cash provided by financing activities 0.06 26.48 (26.42 ) -100 % Net increase (decrease) in cash, cash equivalents and restricted cash (12.63 ) 16.48 (29.11 ) -177 % Cash, cash equivalents and restricted cash, beginning of year 18.25 1.77 16.48 931 % Cash, cash equivalents and restricted cash, end of year $ 5.62 $ 18.25 $ (12.63 ) -69 % Operating activities Net cash used in operating activities for the year ended June 30, 2023 was approximately $9.16 million, compared to approximately $4.94 million for the year ended June 30, 2022.
Such financing may not be available on terms favorable to the Company, or at all. 36 Liquidity and Capital Resources For the Years Ended June 30, Change 2024 2023 $ % (in millions) Net cash used in operating activities $ (5.21 ) $ (9.16 ) $ 3.95 43 % Net cash used in investing activities (1.53 ) (3.53 ) 2.00 57 % Net cash provided by financing activities 2.97 0.06 2.91 NM Decrease in cash, cash equivalents and restricted cash (3.77 ) (12.63 ) 8.86 -70 % Cash, cash equivalents and restricted cash, beginning of year 5.62 18.25 (12.63 ) -69 % Cash and cash equivalents, end of year $ 1.85 $ 5.62 $ (3.77 ) -67 % Operating activities Net cash used in operating activities for the year ended June 30, 2024 was approximately $5.21 million, compared to approximately $9.16 million for the year ended June 30, 2023.
Actual results could differ materially because of the factors discussed in “Risk Factors” elsewhere in this Annual Report, and other factors that we may not know. 27 Overview We are an Immersive technology company, comprised of a diversified group of wholly-owned and operated Virtual (“VR”) and Augmented (“AR”) Reality software and services companies, providing enterprise-focused software, services and solutions.
Actual results could differ materially because of factors discussed in “Risk Factors” elsewhere in this Report, and other factors that we may not know. See “Cautionary Statement Regarding Forward-Looking Information.” Company Overview The Glimpse Group, Inc. (“Glimpse”, the “Company”) is an Immersive technology company, providing enterprise focused Virtual Reality (VR), Augmented Reality (AR) and Spatial Computing software and services.
As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales taxes and other taxes are excluded from revenues. For distinct performance obligations recognized at a point in time, any unrecognized portion of revenue and any corresponding unrecognized expenses are presented as deferred revenue/contract liability and deferred costs/contract asset, respectively, in the accompanying consolidated balance sheets.
For distinct performance obligations recognized at a point in time, any unrecognized portion of revenue and any corresponding unrecognized expenses are presented as deferred revenue/contract liability and deferred costs/contract asset, respectively, in the accompanying consolidated balance sheets. Contract assets include cash and equity based payroll costs, and may include payments to consultants and vendors.
General and Administrative General and administrative expenses (primarily representing headcount and administrative related costs) for the year ended June 30, 2023 were approximately $5.04 million compared to $4.45 million for the year ended June 30, 2022, an increase of approximately 13%. This reflects the addition of new subsidiaries through acquisitions.
The decrease reflects reduced headcount throughout the Company, driven by reduced revenue. General and Administrative General and administrative expenses (primarily representing headcount and administrative related costs) for the year ended June 30, 2024 were approximately $4.29 million compared to $5.04 million for the year ended June 30, 2023, a decrease of approximately 15%.
The increase reflects the addition of subsidiary companies through acquisitions and new customers. 33 We break out our revenues into two main categories – Software Services and Software License. ● Software Services revenues are primarily comprised of Immersive technology projects, services related to our software licenses and consulting retainers. ● Software License revenues are comprised of the sale of our internally developed/acquired Immersive technology software as licenses or as software-as-a-service (“SaaS”).
We break out our revenues into two main categories - Software Services and Software License. ● Software Services revenues are primarily comprised of Immersive technology projects, services related to our software licenses and consulting retainers. ● Software License revenues are comprised of the sale of our internally developed Immersive technology software as licenses or as software-as-a-service (“SaaS”). 32 For the year ended June 30, 2024, Software Services revenue was approximately $8.13 million compared to approximately $12.59 million for the year ended June 30, 2023, a decrease of approximately 35%.
Net loss For the year ended June 30, 2023, we incurred a net loss of approximately $28.57 million compared to a net loss of approximately $5.97 million for the year ended June 30, 2022, an increase of approximately 379% year-over-year.
This represents interest income on money market fund balances. Net loss For the year ended June 30, 2024, we incurred a net loss of approximately $6.39 million compared to a net loss of approximately $28.57 million for the year ended June 30, 2023, an improvement of approximately 78% year-over-year.
The decrease in internal staffing as a percentage of total cost of goods sold was due to the addition of BLI and S5D, which have a higher utilization of external production sources. 34 Operating Expenses For the Years Ended June 30, Change 2023 2022 $ % (in millions) Research and development expenses $ 8.79 $ 6.16 $ 2.63 43 % General and administrative expenses 5.04 4.45 0.59 13 % Sales and marketing expenses 7.49 3.14 4.35 139 % Amortization of acquisition intangible assets 2.05 0.48 1.57 327 % Intangible asset impairment 15.35 - 15.35 N/A Change in fair value of acquisition contingent consideration (0.70 ) (1.86 ) 1.16 -62 % Total Operating Expenses $ 38.02 $ 12.37 $ 25.65 207 % Operating expenses for the year ended June 30, 2023 were approximately $38.02 million compared to $12.37 million for the year ended June 30, 2022, an increase of approximately 207%.
Operating Expenses For the Years Ended June 30, Change 2024 2023 $ % (in millions) Research and development expenses $ 5.45 $ 8.79 $ (3.34 ) -38 % General and administrative expenses 4.29 5.04 (0.75 ) -15 % Sales and marketing expenses 2.82 7.49 (4.67 ) -62 % Amortization of acquisition intangible assets 1.24 2.05 (0.81 ) -40 % Goodwill impairment 0.38 12.85 (12.47 ) -97 % Intangible asset impairment 2.56 2.50 0.06 2 % Change in fair value of acquisition contingent consideration (4.27 ) (0.70 ) (3.57 ) 510 % Total Operating Expenses $ 12.47 $ 38.02 $ (25.55 ) -67 % Operating expenses for the year ended June 30, 2024 were approximately $12.47 million compared to $38.02 million for the year ended June 30, 2023, a decrease of approximately 67%.
As of June 30 2023, contingent consideration for acquisition liabilities contains cash components ranging up to $4.5 million, potentially payable through July 2025 contingent on BLI achieving certain revenue milestones.
As of June 30, 2024, contingent consideration for acquisition liabilities contains cash components ranging up to $3.0 million, potentially payable through October 2025 contingent on BLI achieving certain revenue milestones. Emerging Growth Company and Smaller Reporting Company Status We are an “emerging growth company,” as defined in the JOBS Act.
This standard removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. This guidance also clarifies and simplifies other areas of ASC 740. The Company will adopt this standard on July 1, 2023.
Income Taxes In December 2019, the FASB issued ASU No. 2019-12 to simplify the accounting in Accounting Standards Codification (“ASC”) 740, Income Taxes. This standard removes certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences.
Gross Profit For the Years Ended June 30, Change 2023 2022 $ % (in millions) Revenue $ 13.48 $ 7.27 $ 6.21 85 % Cost of Goods Sold 4.26 1.24 3.02 244 % Gross Profit 9.22 6.03 3.19 53 % Gross Profit Margin 68 % 83 % Gross profit was approximately 68% for the year ended June 30, 2023 compared to approximately 83% for the year ended June 30, 2022.
Gross Profit For the Years Ended June 30, Change 2024 2023 $ % (in millions) Revenue $ 8.80 $ 13.48 $ (4.68 ) -35 % Cost of Goods Sold 2.94 4.26 (1.32 ) -31 % Gross Profit $ 5.86 $ 9.22 $ (3.36 ) -36 % Gross Profit Margin 67 % 68 % Gross profit was approximately 67% for the year ended June 30, 2024 compared to approximately 68% for the year ended June 30, 2023, essentially flat reflecting a consistent year over year mix in product revenue and gross profit margin.
This is primarily driven by an increase in net loss and a decrease in accounts payable and deferred revenue primarily related to the BLI acquisition. Investing activities Net cash used in investing activities for the year ended June 30, 2023 was approximately $3.53 million compared to approximately $5.06 million for the year ended June 30, 2022.
Investing activities Net cash used in investing activities for the year ended June 30, 2024 was approximately $1.53 million compared to approximately $3.53 million for the year ended June 30, 2023. 2024 primarily represented a contingent consideration payment for the BLI acquisition based on achieved revenue milestone. 2023 represented the initial BLI acquisition payment at closing and a contingent acquisition consideration payment to S5D.
The following information should be read in conjunction with our Consolidated Financial Statements and related notes contained in this Annual Report. Critical Accounting Policies and Estimates and Recent Accounting Pronouncements Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
While this transition is still ongoing, we believe that Spatial Core is a key differentiator, growth driver and competitive advantage for us. 27 Critical Accounting Policies and Estimates and Recent Accounting Pronouncements Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The decrease was driven by the addition of BLI and S5D lower margin project revenue. For the years ended June 30, 2023 and 2022, internal staffing was approximately $2.52 million (59% of total cost of goods sold) and approximately $1.02 million (82% of total cost of goods sold), respectively.
For the years ended June 30, 2024 and 2023, internal staffing was approximately $1.90 million (65% of total cost of goods sold) and approximately $2.52 million (59% of total cost of goods sold), respectively. The increase in internal staffing as a percentage of total cost of goods sold reflects the intentional reduced reliance on subcontractors.
Research and Development Research and development expenses (primarily representing headcount related costs) for the year ended June 30, 2023 were approximately $8.79 million compared to $6.16 million for the year ended June 30, 2022, an increase of approximately 43%.
The decrease reflects a decrease in goodwill impairment, reductions in headcount across expense categories driven by reduced revenue and an increase in the gain on change in fair value on acquisition contingent consideration. 33 Research and Development Research and development expenses (primarily representing headcount related costs) for the year ended June 30, 2024 were approximately $5.45 million compared to $8.79 million for the year ended June 30, 2023, a decrease of approximately 38%.
Other contracts can include various services and products which are at times capable of being distinct, and therefore may be accounted for as separate performance obligations. 30 Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services.
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales taxes and other taxes are excluded from revenues.
This primarily reflects the difference in the cash component of the BLI 2023 acquisition compared to the S5D, XR Terra and PulpoAR 2022 acquisitions. 2023 also included a $1.0 million cash contingent consideration payment made to S5D. 38 Financing activities Cash flow provided from financing activities during the year ended June 30, 2023 was approximately $0.06 million, compared to $26.48 million for the prior period.
Financing activities Cash flow provided from financing activities during the year ended June 30, 2024 was approximately $2.97 million, compared to $0.06 million for the prior period. 2024 represents the net proceeds of the common stock purchase agreement in October 2023.
For the year ended June 30, 2023, Software License revenue was approximately $0.89 million compared to approximately $0.55 million for the year ended June 30, 2022, an increase of approximately 62%. The increase reflects the addition of subsidiary companies through acquisitions and new customers.
The decrease is driven by the items described above. For the year ended June 30, 2024, Software License revenue was approximately $0.67 million compared to approximately $0.89 million for the year ended June 30, 2023, a decrease of approximately 25% driven by the divestiture of PulpoAR.
This primarily reflects the addition of new subsidiaries through acquisitions. Intangible Asset Impairment Intangible asset impairment for the year ended June 30, 2023 was an expense of approximately $15.35 million compared to none in the previous year. This expense primarily represents impairment of S5D goodwill and long-lived assets. Also included is the impairment of AUGGD goodwill and long-lived assets.
The decrease is due to the write off intangible assets related to S5D in 2023 and those related to PulpoAR in the first quarter of fiscal 2024. Goodwill Impairment Goodwill impairment for the year ended June 30, 2024 was approximately $0.38 million compared to approximately $12.85 million in the previous year.
The increase is driven by non-cash intangible asset impairment and amortization expenses relating to previous acquisitions and the addition of newly acquired subsidiaries’ expenses outpacing the increase in revenue and gross profit. Non-GAAP Financial Measures The following discussion and analysis includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures.
Non-GAAP Financial Measures The following discussion and analysis includes both financial measures in accordance with GAAP, as well as non-GAAP financial measures.
Removed
These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations.
Added
In fiscal year 2024, we shifted our businesses focus (“Strategic Shift”) to providing immersive technology solutions software and services that are primarily driven by Spatial Computing, Cloud and Artificial Intelligence (“AI”), which we refer to as “Spatial Core”.
Removed
By leveraging our platform, we strive to cultivate and manage the business operations of our Immersive technology subsidiary companies, with the goal of allowing each underlying company to better focus on mission-critical endeavors, collaborate with the other subsidiary companies, reduce time to market, optimize costs, improve product quality and leverage joint go-to-market strategies.
Added
The Company currently generates its revenues primarily from customers in the United States.
Removed
Subject to operational, market and financial developments and conditions, we intend to carefully add to our current portfolio of subsidiary companies via a combination of organic expansion and/or outside acquisitions. The Immersive technology industry is an early-stage technology industry with nascent markets.
Added
If there are significant contractually stated ongoing service obligations to be performed during the term of the Software License or SaaS contract, then revenues are recognized ratably over the term of the contract.
Removed
We do not currently target direct-to-consumer (“B2C’) customers, we focus primarily on the business-to-business (“B2B”) and business-to-business-to-consumer (“B2B2C”) segments. In addition, we are hardware agnostic. At the time of this filing, we have approximately 165 full time employees, primarily software developers, engineers and 3D artists. Of these, approximately 77 are based in the US and 88 internationally primarily in Turkey.
Added
Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses In September 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326) which requires measurement and recognition of expected credit losses for financial assets held.
Removed
Further, during the year ended June 30, 2022, the Company early adopted ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an acquirer to account for the related revenue contracts, acquired in the business acquisition, in accordance with ASC Topic 606 Revenue from Contracts with a Customer as if the Company had originated the contracts.
Added
The Company adopted this guidance on July 1, 2023 and the impact of the adoption was not material to our consolidated financial statements as credit losses are not expected to be significant based on historical collection trends, the financial condition of payment partners, and external market factors.
Removed
The Company’s other financial instruments consist primarily of accounts receivable, accounts payable, accrued liabilities and other liabilities, and approximate fair value due to the short-term nature of these instruments.
Added
This guidance also clarifies and simplifies other areas of ASC 740. The Company adopted this guidance on July 1, 2023 using the prospective transition method.
Removed
Revenue Recognition Nature of Revenues The Company reports its revenues in two categories: ● Software Services: Virtual and Augmented Reality projects, solutions and consulting services. ● Software License and Software-as-a-Service (“SaaS”): Virtual and Augmented Reality software that is sold either as a license or as a SaaS subscription.
Added
The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. 31 Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.
Removed
Recently Adopted Accounting Pronouncements Leases Adoption of the New Lease Accounting Standard On July 1, 2022, the Company adopted ASU No. 2016-02, Leases (Topic 842), using the modified retrospective transition method applied at the adoption date of the standard.
Added
The amendments are effective for the Company’s annual periods beginning July 1, 2025. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.
Removed
Results for reporting periods beginning after July 1, 2022 are presented under the new leasing standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting.
Added
The decrease reflects our Strategic Shift, which has resulted in a significant turnover in our historical customer base and the divestiture of, and consolidation of, multiple of our entities.
Removed
The Company has elected to utilize the package of practical expedients at the time of adoption, which allows the Company to (1) not reassess whether any expired or existing contracts are or contain leases, (2) not reassess the lease classification of any expired or existing leases, and (3) not reassess initial direct costs for any existing leases.
Added
The decrease was driven by merger and acquisition fees related to the BLI acquisition in 2023 and a reduction in headcount year over year.
Removed
The Company also has elected to utilize the short-term lease recognition exemption and, for those leases that qualified, the Company did not recognize right-of-use (“ROU”) assets or lease liabilities.
Added
In addition, there was a reduction in revenue based incentive expense, and furthermore, a gain (i.e., expense reduction) in stock based incentive expense due to a decrease in the fair value of the Company’s common stock between measurement periods prior to payment.
Removed
As a result of adoption, the Company recorded ROU assets related to office facility leases which are recognized on the consolidated balance sheet and the associated lease liabilities are recognized on the consolidated balance sheet.
Added
Amortization of Acquisition Intangible Assets Amortization of acquisition intangible assets expense for the year ended June 30, 2024 was approximately $1.24 million compared to $2.05 million for the year ended June 30, 2023, a decrease of approximately 40%.
Removed
The present value of the Company’s remaining lease payments, which comprise the lease liabilities, was estimated using an estimated incremental borrowing rate as of the adoption date. The adoption resulted in no adjustment to July 1, 2022 accumulated deficit on the consolidated balance sheet.
Added
The 2023 impairment primarily represents the write off of goodwill from the acquisition of S5D due to deteriorating revenue and operating results and forecasts. The 2024 impairment represents the write off of goodwill from the divestiture of PulpoAR, also driven by poor revenue and operating results and forecasts.

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Other VRAR 10-K year-over-year comparisons