UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40556

THE GLIMPSE GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada		81-2958271
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

15 West 38th St., 12th Fl New York, NY		10018
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (917) 292-2685

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001 per share		VRAR		The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ‘‘emerging growth company’’ in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company filer	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒

As of May 9, 2024, the registrant had 18,148,217 shares of common stock, par value $0.001 per share, outstanding.

THE GLIMPSE GROUP, INC.

TABLE OF CONTENTS

		Page No.
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	29
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	38
ITEM 4.	CONTROLS AND PROCEDURES	38
PART II	OTHER INFORMATION	39
ITEM 1.	LEGAL PROCEEDINGS	39
ITEM 1A.	RISK FACTORS	39
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	39
ITEM 6.	EXHIBITS	40
SIGNATURES		41

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2024 and 2023

THE GLIMPSE GROUP, INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Page
Index to Condensed Consolidated Financial Statements (Unaudited)	4
Condensed Consolidated Balance Sheets	5
Condensed Consolidated Statements of Operations	6
Condensed Consolidated Statements of Stockholders’ Equity	7-8
Condensed Consolidated Statements of Cash Flows	9
Notes to Condensed Consolidated Financial Statements	10-28

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of March 31, 2024			As of June 30, 2023
	(Unaudited)			(Audited)
ASSETS
Cash and cash equivalents	$	4,285,343		$	5,619,083
Accounts receivable		975,172			1,453,770
Deferred costs/contract assets		72,205			158,552
Prepaid expenses and other current assets		813,193			562,163
Total current assets		6,145,913			7,793,568

Equipment, net		184,954			264,451
Right-of-use assets, net		522,449			627,832
Intangible assets, net		2,820,068			4,284,151
Goodwill		10,857,600			11,236,638
Other assets		73,273			71,767
Total assets	$	20,604,257		$	24,278,407

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	241,072		$	455,777
Accrued liabilities		246,971			635,616
Accrued non cash performance bonus		-			1,041,596
Deferred revenue/contract liabilities		69,847			466,393
Lease liabilities, current portion		413,237			405,948
Contingent consideration for acquisitions, current portion		2,918,939			5,120,791
Total current liabilities		3,890,066			8,126,121

Long term liabilities
Contingent consideration for acquisitions, net of current portion		1,414,682			4,505,000
Lease liabilities, net of current portion		211,638			423,454
Total liabilities		5,516,386			13,054,575

Commitments and contingencies		-			-

Stockholders’ Equity
Preferred Stock, par value $0.001 per share, 20 million shares authorized; 0 shares issued and outstanding		-			-
Common Stock, par value $0.001 per share, 300 million shares authorized; 18,140,217 and 14,701,929 issued and outstanding, respectively		18,141			14,702
Additional paid-in capital		74,114,774			67,854,108
Accumulated deficit		(59,045,044	)		(56,644,978	)
Total stockholders’ equity		15,087,871			11,223,832
Total liabilities and stockholders’ equity	$	20,604,257		$	24,278,407

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	2024			2023			2024			2023
	For the Three Months Ended						For the Nine Months Ended
	March 31,						March 31,
	2024			2023			2024			2023
Revenue
Software services	$	1,466,397		$	3,119,948		$	6,510,740		$	9,868,920
Software license/software as a service		429,246			552,442			566,208			705,041
Total Revenue		1,895,643			3,672,390			7,076,948			10,573,961
Cost of goods sold		569,461			1,223,531			2,406,479			3,313,409
Gross Profit		1,326,182			2,448,859			4,670,469			7,260,552
Operating expenses:
Research and development expenses		1,136,848			2,157,307			4,209,518			6,692,332
General and administrative expenses		1,233,904			1,137,231			3,375,140			3,773,231
Sales and marketing expenses		559,681			1,456,883			2,138,539			4,938,213
Amortization of acquisition intangible assets		291,036			550,786			950,192			1,536,467
Goodwill impairment		-			250,000			379,038			250,000
Intangible asset impairment		-			229,182			522,166			229,182
Change in fair value of acquisition contingent consideration		(291,980	)		1,947,989			(4,317,524	)		(677,113	)
Total operating expenses		2,929,489			7,729,378			7,257,069			16,742,312
Loss from operations before other income		(1,603,307	)		(5,280,519	)		(2,586,600	)		(9,481,760	)

Other income
Interest income		61,051			57,921			186,534			184,800
Net Loss	$	(1,542,256	)	$	(5,222,598	)	$	(2,400,066	)	$	(9,296,960	)

Basic and diluted net loss per share	$	(0.09	)	$	(0.37	)	$	(0.15	)	$	(0.68	)

Weighted-average shares used to compute basic and diluted net loss per share		17,195,322			14,093,597			16,194,523			13,727,595

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2024

(Unaudited)

	Shares		Amount		Paid-In Capital		Deficit			Total
	Common Stock				Additional		Accumulated
	Shares		Amount		Paid-In Capital		Deficit			Total
Balance as of January 1, 2024		16,722,146	$	16,723	$	72,283,210	$	(57,502,788	)	$	14,797,145
Common stock issued to vendors for compensation		5,626		5		15,185		-			15,190
Common stock issued to satisfy contingent acquisition obligations		750,000		750		846,752		-			847,502
Common stock and stock option based compensation expense		329,803		330		468,011		-			468,341
Common stock and stock option based board of directors expense		332,642		333		501,616		-			501,949
Net loss		-		-		-		(1,542,256	)		(1,542,256	)
Balance as of March 31, 2024		18,140,217	$	18,141	$	74,114,774	$	(59,045,044	)	$	15,087,871

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED MARCH 31, 2024

(Unaudited)

	Common Stock				Additional			Accumulated
	Shares		Amount		Paid-In Capital			Deficit			Total
Balance as of July 1, 2023		14,701,929	$	14,702	$	67,854,108		$	(56,644,978	)	$	11,223,832
Common stock issued in Securities Purchase Agreement, net		1,885,715		1,886		2,966,615			-			2,968,501
Common stock issued to vendors for compensation		34,197		34		88,438			-			88,472
Common stock issued for exercise of options		8,819		9		(9	)		-			-
Common stock issued to satisfy contingent acquisition obligations		785,714		786		973,861			-			974,647
Common stock and stock option based compensation expense		391,201		391		1,586,870			-			1,587,261
Common stock and stock option based board of directors expense		332,642		333		644,891			-			645,224
Net loss		-		-		-			(2,400,066	)		(2,400,066	)
Balance as of March 31, 2024		18,140,217	$	18,141	$	74,114,774		$	(59,045,044	)	$	15,087,871

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2023

(Unaudited)

	Common Stock				Additional		Accumulated
	Shares		Amount		Paid-In Capital		Deficit			Total
Balance as of January 1, 2023		13,966,007	$	13,968	$	63,069,423	$	(32,156,057	)	$	30,927,334
Common stock issued to vendors for compensation		1,800		2		5,236		-			5,238
Common stock issued for exercise of options		15,315		15		21,180		-			21,195
Common stock issued for contingent acquisition obligation		326,684		326		1,358,678		-			1,359,004
Common stock and stock option based compensation expense		30,326		30		847,372		-			847,402
Stock option-based board of directors expense		-		-		85,752		-			85,752
Net loss		-		-		-		(5,222,598	)		(5,222,598	)
Balance as of March 31, 2023		14,340,132	$	14,341	$	65,387,641	$	(37,378,655	)	$	28,023,327

SEC Form 10-Q filed by The Glimpse Group Inc.