Filed 2025-09-29 · Period ending 2025-06-30 · 48,982 words · SEC EDGAR
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# Glimpse Group, Inc. (GGRP) — 10-K **Filed:** 2025-09-29 **Period ending:** 2025-06-30 **Accession:** 0001493152-25-016073 **Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1854445/000149315225016073/) **Origin leaf:** 03dbade5781a94a29ad530ad3e72ae390f0088eb4f5d2782c875f472fd2381ba **Words:** 48,982 --- ** ** **UNITED STATES** **SECURITIES AND EXCHANGE COMMISSION** **Washington, D.C. 20549** **Form 10-K** **(Mark One)** | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | **For the fiscal year ended June 30, 2025** **or** | | 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 No.) | | | 15 West 38th St., 12th Floor New York, NY | | 10018 | | | (Address of principal executive offices) | | (Zip Code) | | **Registrants telephone number, including area code: (917) 292-2685** **Securities registered pursuant to Section 12(b) of the Act:** | Title of each class | | Ticker symbol | | Name of each exchange on which registered | | | Common Stock, $0.001 par value per share | | VRAR | | The Nasdaq Stock Market LLC | | **Securities registered pursuant to Section 12(g) of the Act: None** Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No 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 | | | | | | 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 has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No As of December 31, 2024, the aggregate market value of the registrants voting and non-voting common equity held by non-affiliates of the registrant was approximately $41,000,000 based on the closing sale price as reported on the Nasdaq Capital Market of $2.47 per share. As of September 26, 2025, 21,066,006 shares of the registrants common stock were issued and outstanding. | | | **TABLE OF CONTENTS** **THE GLIMPSE GROUP, INC.** **ANNUAL REPORT ON FORM 10-K** **FOR THE YEAR ENDED JUNE 30, 2025** | | Page | | | PART I | 4 | | | Item 1. Business | 4 | | | Item 1A. Risk Factors | 11 | | | Item 1B. Unresolved Staff Comments | 25 | | | Item 1C. Cybersecurity | 25 | | | Item 2. Properties | 26 | | | Item 3. Legal Proceedings | 26 | | | Item 4. Mine Safety Disclosures | 26 | | | | | | | PART II | 27 | | | Item 5. Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 27 | | | Item 6. [Reserved] | 28 | | | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations | 28 | | | Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 39 | | | Item 8. Financial Statements and Supplementary Data | 39 | | | Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 39 | | | Item 9A. Controls and Procedures | 39 | | | Item 9B. Other Information | 39 | | | Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 39 | | | | | | | PART III | 40 | | | Item 10. Directors, Executive Officers and Corporate Governance | 40 | | | Item 11. Executive Compensation | 45 | | | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 48 | | | Item 13. Certain Relationships and Related Transactions, and Director Independence | 50 | | | Item 14. Principal Accountant Fees and Services | 50 | | | | | | | PART IV | 51 | | | Item 15. Exhibits and Financial Statement Schedules | 51 | | | Item 16. Form 10-K Summary | 52 | | | Signatures | 53 | | | 2 | | **CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS** This Annual Report on Form 10-K (this Report) includes statements of our expectations, intentions, plans, and beliefs that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). It is important for an investor to understand that these statements involve risks and uncertainties, some of which are beyond our control. These statements relate to the discussion of our business strategies and our expectations concerning future operations, margins, profitability, liquidity, and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. We sometimes use words such as anticipate, believe, continue, could, estimate, expect, intend, may, plan, potential, predict, project, seek, should, think, will, would, or the negative of these words or other similar or comparable terms and phrases, including references to assumptions, in this Report to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties, risks and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by these forward-looking statements. Such risks, uncertainties and other factors also include those listed in the section titled Risk Factors and elsewhere in this Report and our other filings with the Securities and Exchange Commission (SEC). When considering these forward-looking statements, you should keep in mind the cautionary statements in this Report. New risks and uncertainties arise from time to time, and we cannot predict those events or how they may affect us. We assume no obligation to update any forward-looking statements after the date of this Report as a result of new information, future events or developments, except as required by applicable laws and regulations. When used in this Report, the terms the Company, Glimpse Group, Glimpse, we, us, ours, and similar terms refer to The Glimpse Group, Inc. | 3 | | **PART I** **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** We are an Immersive technology company, providing enterprise focused Virtual Reality (VR), Augmented Reality (AR) and Spatial Computing software and services (Immersive technologies). Glimpses operating entities are located in the United States. We believe that we offer significant exposure to the growing and potentially transformative Immersive technology markets, while mitigating downside risk via our diversified model and ecosystem. 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 with an opportunity to invest directly via a diversified infrastructure. 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. We currently target a wide array of industry verticals, including but not limited to: Corporate Training, Education, Healthcare, Government & Defense, Branding/Marketing/Advertising, Retail, Media & Entertainment, Corporate Events and Social VR support groups and therapy. We focus primarily on the business-to-business (B2B) and business-to-business-to-consumer (B2B2C) segments, and we are hardware agnostic. In fiscal year 2024, we shifted our businesses (Strategic Shift) to focus on providing immersive technology solutions software and services that are primarily driven by Spatial Computing, Cloud and Artificial Intelligence (AI), including our product Spatial Core, led by our entity Brightline Interactive, LLC (BLI). We believe that Spatial Core is a key differentiator, growth driver and competitive advantage for us. **The Glimpse Ecosystem** We develop, commercialize and market innovative and proprietary Immersive technology software products, solutions. 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. Each of our ecosystem entities share operational, financial and intellectual property (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. 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. All employees, no matter which entity they are allocated to, are Glimpse employees. Additionally, aligned economic incentives encourage cross-company collaboration. Substantially all of our employees own equity in our Company, further driving cross-pollination of ideas and fostering collaboration. While each entity owns its own IP, our parent company currently owns 100% of each entity. | 4 | | Organizational Chart: * **Glimpse Ecosystem Entities** | 1. | Brightline Interactive, LLC (BLI): Spatial computing, Immersive technologies, AI and Cloud (Spatial Core), primarily targeting the Department of Defense (DoD) and large enterprise segments. | | | | | | | 2. | Sector 5 Digital, LLC (S5D): Corporate Immersive technologies experiences and events. | | | | | | | 3. | Glimpse Learning, LLC: Leveraging immersive technologies and AI for education, healthcare & training. | | | | | | | 4. | Glimpse Lenses, LLC: life-like 3D modeling and Augment Reality lens creation. | | | 5 | | **Key Business Developments During Fiscal Year 2025** Divestitur**e*** As part of our strategic realignment around Spatial Core and divestiture of non-core assets, on October 7, 2024, we announced that, we had entered into an agreement, effective on October 1, 2024, to divest the business of our then wholly owned subsidiary company QReal, LLC (QReal) and its related operating entity, GLIMPSE GROUP YAZILIM VE ARGE TCARET ANONM RKET, in a management buyout by the then General Manager of QReal (the Divestiture). Pursuant to the Divestiture, we retain the contract and resulting revenues from QReals largest customer in full until such time that we have collected and retained $1.35 million net cash in the aggregate, after taking into account all related operating expenses and fees (the Milestone). After satisfaction of the Milestone, we will receive a monthly cash revenue share for a period of 18 months in relation to any revenues generated from this same customer. In connection with the Divestiture, we were also issued (i) a $1.56 million senior secured convertible note in the new independent entity and (ii) a minority equity stake in the new independent entity. Principal payback on the senior secured convertible note is tied directly to revenue collected by the new entity (separate from the Milestone). *Securities Purchase Agreement* On December 23, 2024, we closed a registered direct offering pursuant to a securities purchase agreement pursuant to which we sold to an institutional investor, 1,990,000 shares of our common stock and pre-funded warrants to purchase up to 760,000 shares of our common stock. The purchase price for each share of common stock was $2.65 per share and the purchase price for each pre-funded warrant was $2.649 (which was equal to the purchase price per share of common stock, less $0.001). The pre-funded warrants had an exercise price of $0.001 per share of common stock, became immediately exercisable upon issuance, and were fully exercised in January 2025. We realized net proceeds (after placement agent fees and other offering expenses) of $6.79 million from the offering. *At-The-Market Offering* On July 11, 2025, we entered into a Sales Agreement with WestPark Capital, Inc., as sales agent, pursuant to which we may offer and sell, from time to time through WestPark Capital, Inc., up to $3,081,340 of our common stock, by any method permitted by law and deemed to be an at the market offering as defined in Rule 415(a)(4) under the Securities Act. We refer to the foregoing transaction in this Report as the ATM Facility. No shares under the ATM Facility have been sold to date. *SpatialCore Contract* On August 13, 2025 we entered into a $2+ million SpatialCore contract to be delivered over a 12 month period. **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. 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 and incorporating AI technologies. 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. | 6 | | Immersive technologies are emerging technologies, and the markets for them are still nascent. 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. Additionally, HMD and telecommunication (5G) advancements have been driving vast improvements in capabilities and ease of use, while significantly reducing headset cost. As a result, market adoption has accelerated and is expected to continue. Leading technology companies such as Meta, 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. 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 and Meta Ray-Ban smart glasses, have become significantly lighter, more comfortable, lower priced, with higher resolution and increasingly wireless/mobile. With a standalone mobile headset, users no longer need an expensive gaming computer to power the headset and they also do not have a wire tethered to that computer restricting movement. These advances have facilitated easier corporate procurement and integration. The accelerating rollout of 5G should enable further improvement in user experience since with 5G, remote processing and heavier, real time applications become possible without noticeable visual lag, allowing for lighter, smaller, more comfortable HMDs with longer battery life. 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. **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 Glimpses 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. As an integral part of the business development and sales processes, each entitys 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. These have not yet led to material revenues. **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 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. As such, there are relatively few participants on the Hardware side, some very large (for example: Meta, 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. 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. 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. As part of our strategic shift to Spatial Core, we are focused on providing the middleware enabling this transition. | 7 | | 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). 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. We believe that we have the potential to become a leader in 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. 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 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. 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. **Expansion and Diversification Strategy** As described above in Competitive Environment above, 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. We may continue to add to our ecosystem both companies and technologies, subject to the availability of capital, the value of our equity 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. These potential acquisitions may be domestic or international. **Strategic Divestitures** Each one of our entities has the potential to be divested or spun off. 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. **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. 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 13 filed patent applications in process. | 8 | | **Issued Patents** | Name | | Entity | | Filing Date* | | 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.* **Filed Patents (in process, Provisional and Non-Provisional)** | Name | | Entity | | Filing Date | | US Patent # | | | AUDIO PROCESSING IN A VIRTUAL ENVIRONMENT | | Foretell Studios, 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 | | | CONTROLLED NON-HUMAN CONVERSATION FLOW IN VR | | The Glimpse Group, Inc. | | 4/3/2023 | | 63/456,571 | | | ROBO DIRECTOR | | Sector 5 Digital, LLC | | 11/15/2024 | | 63/730,039 | | | SYSTEM FOR USING CONTEXT AWARE INTERACTIONS WITHIN 3D ENVIRONMENTS | | Foretell Studios, LLC | | 3/25/2025 | | 63/777,080 | | | METHOD FOR VERIFYING OWNERSHIP AND HUMAN PRESENCE IN A VIRTUAL EXPERIENCE | | Foretell Studios, LLC | | 2/28/2025 | | 63/764,699 | | | SYSTEM FOR COMMERCIALLY DRIVEN AI RESPONSE MODIFICATIONS USING ADAPTIVE FILTER TECHNOLOGY | | Foretell Studios, LLC | | 3/25/2025 | | 63/777,084 | | | AUGMENTING MIXED REALITY EXPERIENCES WITH CONTEXTUAL VIRTUAL ASSETS SYSTEM | | Sector 5 Digital, LLC | | 6/10/2025 | | 63/821164 | | | SYSTEM THAT USES AI TO ANALYZE A USERS AFFECT, MEASURED BY REFERENCING SUCH THINGS AS BODY MOTION, POSTURE, FACIAL EXPRESSION, VOICE, ETC. AND CALCULATES AN EVALUATION OF THIS DATA WHEN COMPARED TO A RUBRIC. | | Foretell Studios, LLC | | 6/2/2025 | | 63/816,086 | | | METHOD OF ISSUANCE OF ADAPTIVE AWARDS BASED ON AI RECOGNITION OF HUMAN ACHIEVEMENTS | | Foretell Studios, LLC | | 5/22/2025 | | 63/810,572 | | | METHODOLOGY FOR TRAINING AI TO READ ATTITUDINAL AFFECT | | The Glimpse Group, Inc. | | 6/10/2025 | | 63/821,154 | | | 9 | | 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. We may make investments to further strengthen our copyright protection going forward, although no assurances can be given that we will be successful in such patent and trademark protection endeavors. We seek to limit disclosure of our intellectual property by requiring employees, consultants, and partners with access to our proprietary information to execute confidentiality agreements and non-competition agreements (when applicable) and by restricting access to our proprietary information. Due to rapid technological change, we believe that establishing and maintaining an industry and technology advantage in factors such as the expertise and technological and creative skills of our personnel, as well as new services and enhancements to our existing services, are more important to our business and profitability than other available legal protections. 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. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement. Any such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on our business, operating results and financial condition. There can be no assurance that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar services or products. Any failure by us to adequately protect our intellectual property could have a material adverse effect on our business, operating results and financial condition. See Risk Factors-Risks Related to our Business. **Business Cycles** Based on our history and information available to date, we have not been able to identify any seasonality of cycles within our business. 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 customers level of understanding of the Immersive technology space and prior experience. Longer sales cycles often apply to DoD type customers, where product evaluation, contracting and budgeting can be lengthy. **Economic Dependence** For the year ended June 30, 2025, two customers accounted for approximately 61% (40%, and 21%, respectively) of our total gross revenues. No other customer accounted for more than 10% of our revenues for the year ended June 30, 2025. One of the same customers and another customer accounted for approximately 38% (23% and 15%, respectively) of our total gross revenues during the year ended June 30, 2024. No other customer accounted for more than 10% of our revenues for the year ended June 30, 2024. 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. 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. 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. 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. | 10 | | **Human Capital** At June 30, 2025, we had approximately 40 full time employees, primarily software developers, engineers and 3D artists. **Corporate Information** Our website is *www.theglimpsegroup.com*. 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 have included our website address in this Report solely as an inactive textual reference. **ITEM 1A. RISK FACTORS** *Investing in us involves a high degree of risk. You should carefully consider the following risks and uncertainties, together with all other information in this Report, including our consolidated financial statements and related notes and the Managements Discussion and Analysis of Financial Condition and Results of Operations section, before investing in us. Any of the risks and uncertainties we describe below could adversely affect our business, financial condition, results of operations, prospects or the trading price of our securities. The risks described below are not the only ones we face and additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business, financial condition, operating results, prospects and the trading price of our securities.* **Risks Related to Our Business** **We are an early stage technology company.** 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. **We have incurred significant net losses since inception and may continue to incur net losses for the foreseeable future and may never maintain profitability.** We have incurred significant net losses since inception. For the fiscal years ended June 30, 2025 and 2024, we incurred a net loss of approximately $2.6 million and approximately $6.4 million, respectively. As of June 30, 2025, we had an accumulated deficit of approximately $65.6 million. We continue to devote efforts towards building and evolving our technology platform and perusing growth opportunities. Our cash flow has significantly improved in recent quarters and we expect our current cash balance to be sufficient in funding operations for at least the next 12 months from the date of issuance of these consolidated financial statements. However, we may continue to generate negative cash flow in future periods which may eventually require us to raise capital in order to maintain 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. Our ability to raise additional funds through equity or debt financings or other sources will depend on the financial success of our current business and successful implementation of our key strategic initiatives, financial, economic and market conditions and other factors, some of which are beyond our control. 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. 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. **** | 11 | | **** **Our market is competitive and dynamic. New competing products and services could be introduced at any time that could result in reduced profit margins and loss of market share.** The Immersive technology industries are very dynamic, with new technology and services being introduced by a range of players, from larger established companies to start-ups, on a frequent basis. Our competitors may announce new products, services, or enhancements that better meet the needs of end-users or changing industry standards. Further, new competitors or alliances among competitors could emerge. Increased competition may cause price reductions, reduced gross margins and loss of market share, any of which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, the worldwide Immersive technology markets are increasingly competitive. A number of companies developing Immersive technology products and services compete for a limited number of customers. Some of our competitors in this market have substantially greater financial and other resources, larger research and development staffs, and more experience and capabilities in developing, marketing and distributing products. 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 are unable to maintain our pricing due to competitive pressures or other factors, our margins will be reduced and our gross profits, business, results of operations, and financial condition would be adversely affected. The subscription prices for our software platforms, cloud modules, and professional services may decline for a variety of reasons, including competitive pricing pressures, discounts, anticipation of the introduction of new solutions by our competitors, or promotional programs offered by us or our competitors. 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. The plan places significant demands upon managerial, financial, and human resources. Our ability to manage future growth will depend in large part upon several factors, including our ability to rapidly: | | | build or leverage, as applicable, a network of business partners to create an expanding presence in the evolving marketplace for our products and services; | | | | | | | | | | build or leverage, as applicable, sales teams to keep end-users and business partners informed regarding the technical features, issues and key selling points of our products and services; | | | | | | | | | | attract and retain qualified technical personnel in order to continue to develop reliable and flexible products and provide services that respond to evolving customer needs; | | | | | | | | | | develop support capacity for end-users as sales increase, so that we can provide post-sales support without diverting resources from product development efforts; and | | | | | | | | | | expand our internal management and financial controls significantly, so that we can maintain control over our operations and provide support to other functional areas as the number of personnel and size increases. | | Our inability to achieve any of these objectives could harm our business, financial condition and results of operations. | 12 | | **We have material customer concentration, with a limited number of customers accounting for a material portion of our revenues.** For the fiscal years ended June 30, 2025 and 2024, our five largest customers accounted for approximately 76% and 53% of our revenues, respectively. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by these customers or the future demand for the products and services of these customers in the end-user marketplace. In addition, revenues from these customers may fluctuate from time to time based on the commencement and completion of projects, the timing of which may be affected by market conditions or other facts, some of which may be outside of our control. Further, some of our contracts with these customers permit them to terminate our services at any time (subject to notice and certain other provisions). If any of these customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services or we could lose a major customer. Any such development could have an adverse effect on our margins and financial position, and would negatively affect our revenues and results of operations and/or trading price of our common stock. **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. 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. 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. 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 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.** 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. If we experience technical problems or delays, further improvements in our products or technologies and the introduction of future products or technologies could be delayed, and we could incur significant additional expenses and our business may fail. We anticipate that we may require additional funds to increase or sustain our current levels of expenditure for the R&D of new products and technologies, and to obtain and maintain patents and other intellectual property rights in these technologies, the timing and amount of which are difficult to forecast. Any funds we need may not be available on commercially reasonable terms or at all. If we cannot obtain the necessary additional capital when needed, we might be forced to reduce our R&D efforts which would materially and adversely affect our business. 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.** The markets for our products and services are characterized by rapidly changing technology, evolving industry standards and increasingly sophisticated customer requirements. The introduction of products embodying new technology and the emergence of new industry standards can negatively impact the marketability of our existing products and can exert price pressures on existing products. It is critical to our success that we are able to anticipate and react quickly to changes in technology or in industry standards and to successfully develop, introduce, and achieve market acceptance of new, enhanced and competitive products and services on a timely basis and cost-effective basis. We invest substantial resources towards continued innovation; however, there can be no assurance that we will successfully develop new products and services or enhance and improve our existing products and services, that new products and services and enhanced and improved existing products and services will achieve market acceptance or that the introduction of new products and services or enhanced existing products and services by others will not negatively impact us. 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. | 13 | | Development schedules for technology products and services are inherently uncertain. We may not meet our products and/or services development schedules, and development costs could exceed budgeted amounts. Our business, results of operations, financial position and liquidity may be materially and adversely affected if the products or product enhancements that we develop are delayed or not delivered due to developmental problems, quality issues or component shortage problems, or if our products or product enhancements do not achieve market acceptance or are unreliable. We or our competitors will continue to introduce products embodying new technologies. In addition, new industry standards may emerge. Such events could render our existing products obsolete or not marketable, which would have a material adverse effect on our business, results of operations, financial position and liquidity. **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.** 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. 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 entitys and our overall business strategy. 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. 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 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. As a consequence, it is possible that one or more of our entities will not receive adequate capital or management resources. 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 dont allocate resources effectively, our business, financial condition or result of operations could be harmed. **The failure to attract, hire, retain and motivate key personnel could have a significant adverse impact on our operations.** Our success depends on the retention and maintenance of key personnel, including members of senior management and our technical, sales and marketing teams. Achieving this objective may be difficult due to many factors, including competition for such highly skilled personnel, fluctuations in global economic and industry conditions, changes in our management or leadership, competitors hiring practices, and the effectiveness of our compensation programs. The loss of any of these key persons could have a material adverse effect on our business, financial condition or results of operations. Competition for qualified employees is particularly intense in the technology industry. Our failure to attract and to retain the necessary qualified personnel could seriously harm our operating results and financial condition. Competition for such personnel can be intense, and no assurance can be provided that we will be able to attract or retain highly qualified technical and managerial personnel in the future, which may have a material adverse effect on our future growth and profitability. **The continued operation of our business depends on the performance and reliability of the Internet, mobile networks, and other infrastructure that is not under our control.** Our business depends on the performance and reliability of the Internet, mobile networks, and other infrastructure that is not under our control. Disruptions in such infrastructure, including as the result of power outages, telecommunications delay or failure, security breach, or computer virus, as well as failure by telecommunications network operators to provide us with the bandwidth we need to provide our products and offerings, could cause delays or interruptions to our products, offerings, and platforms. 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. | 14 | | **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 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. If we do not provide effective training and support resources for our customers on how to efficiently and effectively use our platforms, our ability to grow our business will suffer, and our business and results of operations may be adversely affected. Additionally, when we announce or release new versions of our platforms or advancements in our technology, we could fail to sufficiently explain or train our customers on how to use such new versions or advancements or we may announce or release such versions prematurely. These failures on our part may lead to our customers being confused about use of our products or expected technology releases, and our ability to grow our business, results of operations, brand and reputation may be adversely affected. **Interruptions, performance problems or defects associated with our platforms may adversely affect our business, financial condition and results of operations.** Our reputation and ability to attract and retain customers and grow our business depends in part on our ability to operate our platforms at high levels of reliability, scalability and performance, including the ability of our existing and potential customers to access our platforms at any time and within an acceptable amount of time. Interruptions in the performance of our platforms, whether due to system failures, computer viruses or physical or electronic break-ins, could affect the availability of our platforms. 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. 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. If our platforms are unavailable or if our customers are unable to access our platforms within a reasonable amount of time or at all, we may experience a loss of customers, lost or delayed market acceptance of our platforms, delays in payment to us by customers, injury to our reputation and brand, legal claims against us, significant cost of remedying these problems and the diversion of our resources. In addition, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition and results of operations, as well as our reputation, may be adversely affected. Further, the software technologies underlying our platforms are inherently complex and may contain material defects or errors, particularly when new products are first introduced or when new features or capabilities are released. We have from time to time found defects or errors in our platforms, and new defects or errors in our existing platforms or new products may be detected in the future by us or our users. We cannot assure you that our existing platforms and new products will not contain defects. Any real or perceived errors, failures, vulnerabilities, or bugs in our platforms could result in negative publicity or lead to data security, access, retention or other performance issues, all of which could harm our business. The costs incurred in correcting such defects or errors may be substantial and could harm our business. Moreover, the harm to our reputation and legal liability related to such defects or errors may be substantial and could significantly harm our business. **** | 15 | | **** **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 markets in which we compete are subject to rapid technological change, evolving industry standards, and changing regulations, as well as changing customer needs, requirements and preferences. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. Accordingly, our ability to increase our revenue depends in large part on our ability to maintain, improve and differentiate our existing platforms and introduce new functionality. We must continue to improve existing features and add new features and functionality to our platforms in order to retain our existing customers and attract new ones. If the technology underlying our platforms become obsolete or do not address the needs of our customers, our business would suffer. Revenue growth from our products depends on our ability to continue to develop and offer effective features and functionality for our customers and to respond to frequently changing data protection regulations, policies and end-user demands and expectations, which will require us to incur additional costs to implement. If we do not continue to improve our platforms with additional features and functionality in a timely fashion, or if improvements to our platforms are not well received by customers, our revenue could be adversely affected. 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. **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. If our systems fail to perform, we could experience disruptions in operations, slower response time or decreased customer satisfaction. System interruptions, errors or downtime can result from a variety of causes, including changes in customer usage patterns, technological failures, changes to our systems, linkages with third-party systems and power failures. Our systems may be vulnerable to disruptions from human error, execution errors, errors in models, employee misconduct, unauthorized trading, external fraud, computer viruses, distributed denial of service attacks, computer viruses or cyberattacks, terrorist attacks, natural disaster, power outage, capacity constraints, software flaws, events impacting key business partners and vendors, and similar events. It could take an extended period of time to restore full functionality to our technology or other operating systems in the event of an unforeseen occurrence. Instances of fraud or other misconduct might also negatively impact our reputation and customer confidence in us, in addition to any direct losses that might result from such instances. Despite our efforts to identify areas of risk, oversee operational areas involving risks, and implement policies and procedures designed to manage these risks, there can be no assurance that we will not suffer unexpected losses, reputational damage or regulatory actions due to technology or other operational failures or errors, including those of our vendors or other third parties. **If we fail to prevent security breaches, improper access to or disclosure of our data or user data, or other hacking and attacks, we may lose users, and our business, reputation, financial condition and results of operations may be materially and adversely affected.** Our business can include the hosting and/or transmission of proprietary information and sensitive or confidential data. In connection with our services business, some of our employees also have access to its customers confidential data and other information, which could be compromised, whether intentionally or unintentionally, by our employees, consultants or vendors. | 16 | | We have privacy and data security policies in place that are designed to prevent security breaches and we have employed significant resources to develop our security measures against breaches. 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. 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. 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. 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. While we do carry cybersecurity insurance, we may not be able to mitigate such risks to any third party. Cybersecurity breaches would not only harm our reputation and business, but also could materially decrease our revenue and net income. A compromise of the security of our information technology systems leading to theft or misuse of our own or our clients proprietary or confidential information, or the public disclosure or use of such information by others, could result in losses, third-party claims against us and reputational harm, including the loss of clients. The theft or compromise of our or our clients information could negatively impact our reputation, financial results and prospects. 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. **Our financial results may fluctuate substantially for many reasons, and past results should not be relied on as indications of future performance.** 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. | | 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 Immersive technology products and services can have a significant adverse effect on the demand for our products and services in any given period. Our customers may cancel or delay purchase orders for a variety of reasons, including, but not limited to, the rescheduling of new product introductions, changes in our customers inventory practices or forecasted demand, general economic conditions affecting our customers markets, changes in our pricing or the pricing of our competitors, new product announcements by us or others, quality or reliability problems related to our products, or selection of competitive products as alternate sources of supply. | 17 | | Thus, there can be no assurance that we will be able to reach profitability on a quarterly or annual basis. We believe that our revenue and operating results will continue to fluctuate, and that period-to-period comparisons are not necessarily indications of future performance. Our revenue and operating results may fail to meet the expectations of public market analysts or investors, which could have a material adverse effect on the price of our common stock. In addition, portions of our expenses are fixed and difficult to reduce if our revenues do not meet our expectations. These fixed expenses magnify the adverse effect of any revenue shortfall. Our plans for implementing our business strategy and achieving profitability are based upon the experience, judgment and assumptions of our key management personnel, and available information concerning the communications and technology industries. If managements assumptions prove to be incorrect, it could have a material adverse effect on our business, financial condition or results of operations. **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.** 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. 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. Additionally, there can be no assurance that we will be able to successfully identify, acquire or profitably manage such additional companies, technologies, or intellectual property or successfully integrate these, if any, into the Glimpse ecosystem without substantial costs, delays or other operational or financial problems. If potential acquisition targets are unwilling to accept our equity as the consideration for their businesses, then we may be required to seek additional financing through the issuance of debt securities or other arrangements to finance the acquisition transaction. If we complete a business combination, we may require additional financing to fund the operations or growth of an acquisition target. Further, acquisitions involve a number of other special risks, including possible adverse effects on our operating results, diversion of managements attention, dependence on retention, hiring and training of key personnel, risks associated with unanticipated problems or legal liabilities, and realization of acquired intangible assets, some or all of which could have a material adverse effect on our business, financial condition and results of operations. In addition, there can be no assurance that the companies, technologies, or intellectual property acquired in the future, if any, will generate anticipated revenues and earnings. As a result, we may be required to seek additional financing through the issuance of equity or debt securities or other arrangements. To the extent that we are unable to acquire additional companies, technologies, or intellectual property or integrate those successfully, our ability to generate and increase our revenues may be reduced significantly. As a result, we may be required to seek additional financing through the issuance of equity or debt securities or other arrangements. As an early-stage company, we cannot assure that such financing will be available on acceptable terms, if at all. With respect to our future acquisition strategy, no assurance can be made that we will have the funds necessary to make future acquisitions. 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. | 18 | | **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.** Even though Glimpses 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. 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. 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 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.** 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. There is a risk that we will not be able to identify suitable acquisition candidates available for sale at reasonable prices, complete any acquisition, or successfully integrate any acquired product or business into our operations. We may face competition for acquisition candidates from other parties including those that have substantially greater available resources. Acquisitions may involve a number of other risks, including: | | | diversion of managements 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 do not successfully address these risks or any other problems encountered in connection with an acquisition, the acquisition could have a material adverse effect on our business, results of operations and financial condition. Problems with an acquired business could have a material adverse effect on our performance or our business as a whole. 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. **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. We intend to continue to pursue additional patent protection for our new software and technology. Although we own multiple patents covering our technology that have already been issued, we may not be able to obtain additional patents that we apply for, or that any of these patents, once issued, will give us commercially significant protection for our technology, or will be found valid if challenged. 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. | 19 | | 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. Any claims and issued patents or pending patent applications may not be broad or strong enough and may not be issued in all countries where our products can be sold or our technologies may not be licensed to provide meaningful protection against any commercial damage to us. Further, others may develop technologies that are similar or superior to our technologies, duplicate our technologies or design around the patents owned by us. Effective intellectual property protection may be unavailable or limited in certain foreign countries. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise use aspects of our processes and devices that we regard as proprietary. Policing unauthorized use of our proprietary information and technology is difficult and our efforts to do so may not prevent misappropriation of our technologies. In the event that our intellectual property protection is insufficient to protect our intellectual property rights, we could face increased competition in the market for our products and technologies, which could have a material adverse effect on our business, financial condition and results of operations. We may become engaged in litigation to protect or enforce our patent and other intellectual property rights or in International Trade Commission proceedings to abate the importation of goods that would compete unfairly with our products. 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. All of these actions would place our patents and other intellectual property rights at risk and may result in substantial costs to us as well as a diversion of management attention. Moreover, if successful, these actions could result in the loss of patent or other intellectual property rights protection for the key technologies on which our business strategy depends. In addition, we rely in part on unpatented proprietary technology, and others may independently develop the same or similar technology or otherwise obtain access to our unpatented technology. To protect our trade secrets, know-how and other proprietary information, we require employees, consultants, financial advisors and strategic partners to enter into confidentiality agreements. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of those trade secrets, know-how or other proprietary information. In particular, we may not be able to fully or adequately protect our proprietary information as we conduct discussions with potential strategic partners. If we are unable to protect the proprietary nature of our technology, it will harm our business. Despite our efforts to protect our intellectual property rights, intellectual property laws afford us only limited protection. A third party could copy or otherwise obtain information from us without authorization. Accordingly, we may not be able to prevent misappropriation of our intellectual property or to deter others from developing similar products or services. Further, monitoring the unauthorized use of our intellectual property is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. 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. As is commonplace in technology companies, we employ individuals who were previously employed at other technology companies. To the extent our employees are involved in research areas that are similar to those areas in which they were involved at their former employers, we may be subject to claims that such employees or we have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of the former employers. 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. 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. | 20 | | **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. Until recently, patent applications were retained in secrecy by the USPTO until and unless a patent was issued. 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. In addition, there may be issued patents in the United States or other countries that are pertinent to our business of which we are not aware. We and our customers could be sued by other parties for patent infringement in the future. Such lawsuits could subject us and them to liability for damages or require us to obtain additional licenses that could increase the cost of our products, which might have an adverse effect on our sales. In addition, in the future we may assert our intellectual property rights by instituting legal proceedings against others. We may not be able to successfully enforce our patents in any lawsuits we may commence. Defendants in any litigation we may commence to enforce our patents may attempt to establish that our patents are invalid or are unenforceable. Any patent litigation could lead to a determination that one or more of our patents are invalid or unenforceable. If a third party succeeds in invalidating one or more of our patents, we may experience greater competition from such party and from others. Our ability to derive sales from products or technologies covered by these patents could be adversely affected. Whether we are defending the assertion of third party intellectual property rights against our business as a result of the use of our technology, or we are asserting our own intellectual property rights against others, such litigation can be complex, costly, protracted and highly disruptive to our business operations by diverting the attention and energies of management and key technical personnel. As a result, the pendency or adverse outcome of any intellectual property litigation to which we are subject could disrupt business operations, require the incurrence of substantial costs and subject us to significant liabilities, each of which could severely harm our business. Plaintiffs in intellectual property cases often seek injunctive relief. Any intellectual property litigation commenced against us could force us to take actions that could be harmful to our business and thus to our sales, including the following: | | | discontinuing selling the products that incorporate or otherwise use technology that contains our allegedly infringing intellectual property; | | | | | | | | | | attempting to obtain a license to the relevant third party intellectual property, which may not be available on reasonable terms or at all; or | | | | | | | | | | attempting to redesign our products to remove our allegedly infringing intellectual property. | | If we are forced to take any of the foregoing actions, we may be unable to sell products that incorporate our technology at a profit or at all. Furthermore, the measure of damages in intellectual property litigation can be complex, and is often subjective or uncertain. If we were to be found liable for infringement of proprietary rights of a third party, the amount of damages we might have to pay could be substantial and is difficult to predict. Decreased sales of our products incorporating our technology would adversely affect our results of operations. 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. **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.** 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. In that case, our ability to effectively market and sell our products and services could suffer, which could harm our business. | 21 | | **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. 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. | | Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may also negatively impact the market price of our common stock. In addition, technology stocks have historically experienced high levels of volatility. In the past, companies who have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our managements attention. **We have received a deficiency notice from Nasdaq, and there can be no assurance that we will continue to be listed on Nasdaq. In the event our common stock is delisted from Nasdaq, the liquidity and market price of our common stock could decline.** Our common stock is listed on the Nasdaq Capital Market, and we must meet certain financial and liquidity criteria to maintain such listing. If we fail to meet applicable continued listing requirements of the Nasdaq Stock Market LLC (Nasdaq), our common stock may be delisted. | 22 | | On September 3, 2024, we received a notification letter from the Listing Qualifications Department of Nasdaq notifying us that, because the closing bid price for our common stock was below $1.00 for the prior 30 consecutive business days, we no longer met the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $1.00 per share (the Minimum Bid Price Requirement). In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), we had a period of 180 calendar days from September 3, 2024, or until March 3, 2025, to regain compliance with the Minimum Bid Price Requirement. On December 24, 2025, we announced that we had received written from the Nasdaq informing the us that we had regained compliance with the Minimum Bid Price Requirement. Even though we regained compliance with the Minimum Bid Price Requirement, we cannot assure that we will not, in the future, fail to comply with Nasdaqs requirements to maintain the listing of our common stock on Nasdaq, or that we will be able to regain compliance in the event of any such non-compliance. A delisting of our common stock from Nasdaq may materially impair our stockholders ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment. **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 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. Accordingly, you may need to rely on sales of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on your investment. **Costs as a result of operating as a public company are significant, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.** 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. 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. **The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an emerging growth company.** We are required to comply with various regulatory and reporting requirements, including those required by the SEC. 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. 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. To maintain and improve the effectiveness of our disclosure controls and procedures, we need to commit significant resources, hire additional staff and provide additional management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth also will require us to commit additional management, operational and financial resources to identify new professionals to join our firm and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert managements attention from other business concerns, which could have a material adverse effect on our results of operations, financial condition or business. | 23 | | **General Risks** **We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies and/or smaller reporting companies will make our common stock less attractive to investors.** We are an emerging growth company, as defined in the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, as amended (JOBS Act). As 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. 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. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. 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. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards. 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 are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting common stock held by non-affiliates is $250 million or more as measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter. 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. **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 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. If securities or industry analysts do not publish research or reports about our business, downgrade our common stock, or publish negative reports about our business, our stock price would likely decline. 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. | 24 | | **ITEM 1B. UNRESOLVED STAFF COMMENTS** Not applicable. **ITEM 1C. CYBERSECURITY** **Risk Management and Strategy** Our cybersecurity risk management program is intended to protect the confidentiality, integrity, and availability of our critical IT systems, information and IP. Cybersecurity risks are among the risks evaluated and considered by, our broader enterprise risk management program, which is designed to identify, assess, prioritize and mitigate risks across the organization to enhance our resilience and support the achievement of our strategic objectives. Our cybersecurity risk management program is led by our Director of Information Technology, who is principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our detection and response to cybersecurity incidents. Our program includes protocols for preventing, detecting and responding to cybersecurity incidents, and cross-functional coordination, and planning for business continuity and disaster recovery. We rely on our information security management system supported by a set of policies based upon industry frameworks, including the NIST Cybersecurity Framework. This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Our cybersecurity risk management program includes: | | | Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment. | | | | | | | | | | Security team principally responsible for managing (i) our cybersecurity risk assessment processes, (ii) our security controls, and (iii) our response to cybersecurity incidents; | | | | | | | | | | The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls. | | | | | | | | | | Cybersecurity awareness training of our employees, incident response personnel, and senior management. | | | | | | | | | | Cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents. | | | | | | | | | | Third-party risk management process for service providers, suppliers, and vendors. | | We also have a cybersecurity incident response plan for the CIRT to assess and manage cybersecurity incidents, which includes escalation procedures based on the nature and severity of the incident including, where appropriate, escalation to our board of directors. As part of our overall risk mitigation strategy, we maintain insurance coverage that is intended to address certain aspects of cybersecurity risks; however, such insurance may not be sufficient in type or amount to cover us against claims related to cybersecurity breaches, cyberattacks and other related breaches. As of the date of this Report, we do not believe that any risks from cybersecurity threats, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. Despite our security measures, however, there can be no assurance that we, or third parties with which we interact, will not experience a cybersecurity incident in the future that will materially affect us. | 25 | | **Governance** Our board of directors has primary responsibility for oversight of our cybersecurity and other information technology risks, including our plans to mitigate cybersecurity risks and to respond to data breaches. Our board of directors receives reports from our Director of Information Technology on cybersecurity matters on as needed basis. These reports can include a range of topics, including our cybersecurity risk profile, the current cybersecurity and emerging threat landscape, the status of ongoing cybersecurity initiatives, incident reports, and the results of internal and external assessments of our information systems. The Audit Committee of our board of directors (the Audit Committee) also annually reviews the adequacy and effectiveness of our information and technology security policies and the internal controls regarding information and technology security and cybersecurity, and periodically receives updates. The Chair of the Audit Committee reports to the full board of directors on these discussions as appropriate. At the management level, our Director of Information Technology who is experienced in cybersecurity matters, leads our enterprise-wide cybersecurity program, and is responsible for assessing and managing our materials risks from cybersecurity threats. In performing his role, our Director of Information Technology is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity risks and incidents through the management of, and participation in, the cybersecurity risk management program and other processes described above, including the maintenance and execution of our cyber incident response plan. Our Director of Information Technology reports to our Chief Financial Officer/Chief Operating Officer and to our Chief Executive Officer. **ITEM 2. PROPERTIES** We are based in New York, New York, with a lease expiring on December 31, 2025. We have not yet determined whether we are going to renew this lease, and if so in what capacity. If we dont renew the current lease, we may move to an alternative location or become fully remote for the New York office. We also have a lease in Ashburn, Virginia for the operations of BLI, expiring in April 2026 which we expect to renew, under terms to be determined. We also have a nominal lease in Richardson, Texas, expiring in November 2026. Our 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. **ITEM 3. LEGAL PROCEEDINGS** From time to time, we may be subject to legal proceedings. We are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. **ITEM 4. MINE SAFETY DISCLOSURES** Not applicable. | 26 | | **PART II** **ITEM 5. MARKET FOR REGISTRANTS 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. **Holders of Record** As of September 22, 2025, we had 100 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. **Recent Sales of Unregistered Securities** | | | Number of Shares* | | | Cash Proceeds | | | Value of Shares | | | | Compensation and vendor expense | | | 11,750 | | | | - | | | $ | 14,218 | | | | Total | | | 11,750 | | | | - | | | $ | 14,218 | | | * For the fourth quarter period ended June 30, 2025. Transactions for prior quarters were previously reported in the Companys Form 10-Q filings for the respective periods. Please refer to Note 10 of our consolidated financial statements included in this Report. The foregoing transactions were exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof. **Purchases of Equity Securities by the Issuer and Affiliated Purchasers** None **Dividends** We have never declared or paid cash dividends on our capital stock. 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. No assurances can be made that any such milestone will be achieved or if achieved that our board of directors will approve any distribution in connection therewith. *Distribution upon sale of business*. 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. 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. 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. 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. *Distribution of consolidated net income*. In the event our annual audited financial statements report consolidated net income, we may distribute, within 90 days after completion of such audit, 10% of the consolidated net income for such fiscal year. 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. 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. 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. 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. In addition, our ability to pay dividends may be restricted by any agreements we may enter into in the future. | 27 | | **ITEM 6. [RESERVED]** **ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** *The objective of this Managements Discussion and Analysis is to allow investors to view the Company from managements perspective, considering items that would have a material impact on future operations. 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, 2025 and 2024, 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. References in this Managements Discussion and Analysis of Financial Condition and Results of Operations to us, we, our and similar terms refer to the Company. This Managements 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 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 Statements.* **Company Overview** We are an Immersive technology company, providing enterprise focused Virtual Reality (VR), Augmented Reality (AR) and Spatial Computing software and services (Immersive technologies). Glimpses operating entities are located in the United States. We believe that we offer significant exposure to the growing and potentially transformative Immersive technology markets, while mitigating downside risk via our diversified model and ecosystem. 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. 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. We currently target a wide array of industry verticals, including but not limited to: Corporate Training, Education, Healthcare, Government & Defense, Branding/Marketing/Advertising, Retail, Media & Entertainment, Corporate Events and Social VR support groups and therapy. We focus primarily on the business-to-business (B2B) and business-to-business-to-consumer (B2B2C) segments, and we are hardware agnostic. In fiscal year 2024, we shifted our businesses focus (Strategic Shift) to focus on providing immersive technology solutions software and services that are primarily driven by Spatial Computing, Cloud and Artificial Intelligence (AI), including our product Spatial Core, led by our entity Brightline Interactive, LLC (BLI). We believe that Spatial Core is a key differentiator, growth driver and competitive advantage for us. | 28 | | **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 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. All significant intercompany accounts and transactions have been eliminated in consolidation. **Use of Accounting Estimates** The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the accompanying consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The principal estimates relate to the valuation of allowance for doubtful accounts, stock options, revenue recognition, allocation of the purchase price of assets relating to business combinations, calculation of contingent consideration for acquisitions, fair value of intangible assets and goodwill impairment. **Business Combinations** The results of a business acquired in a business combination are included in the Companys consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair values as of the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed may require management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenues, costs and cash flows. Estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is typically one year from the acquisition date, if new information is obtained about facts and circumstances that existed as of the acquisition date, changes in the estimated values of the net assets recorded may change the amount of the purchase price allocated to goodwill. 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 (excluding Goodwill)** Intangible assets represent the allocation of a portion of an acquisitions 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. The Company reviews intangibles, being amortized, for impairment when current events indicate that the fair value may be less than the carrying value. | 29 | | **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. Goodwill is not amortized but instead is tested at least annually for impairment, or more frequently when events or changes in circumstances indicate that goodwill might be impaired. **Impairment of Long-Lived Assets** The Company reviews long-lived assets to be held and used, other than goodwill, for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an evaluation of recoverability is required, the estimated undiscounted future cash flows directly associated with the asset are compared with the assets 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. **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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy, which is based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value, is as follows: | | | Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; | | | | | | | | | | Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or | | | | | | | | | | Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | | The Company classifies its cash equivalents and investments within Level 1 of the fair value hierarchy on the basis of valuations based on quoted prices for the specific securities in an active market. The Companys contingent consideration is categorized as Level 3 within the fair value hierarchy. Contingent consideration is recorded within contingent consideration, current, and contingent consideration, non-current, in the Companys consolidated balance sheets as of June 30, 2025 and 2024. Contingent consideration has been recorded at its fair values using unobservable inputs that include assumptions regarding financial forecasts and discount rates. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Companys management. The Companys other financial instruments consist primarily of accounts receivable, accounts payable and other liabilities, and are reported at approximate fair value due to the short-term nature of these instruments. **Revenue Recognition** Nature of Revenues The Company reports its revenues in three categories: | | | Software Services: VR, AR and Spatial Computing projects, solutions and consulting services. | | | | | | | | | | Software License and Software-as-a-Service (SaaS): VR, AR or Spatial Computing software that is sold either as a license or as a SaaS subscription. | | | | | | | | | | Royalty Income: Royalty income earned pursuant to certain specific agreements. | | | 30 | | 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 is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer or service is performed and collection is reasonably assured. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A portion of the Companys 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. 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. 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 and deferred costs, respectively, in the accompanying consolidated balance sheets. Deferred costs include cash based payroll costs, and may include payments to consultants and vendors. For distinct performance obligations recognized over time, the Company records deferred cost (costs in excess of billings) when revenue is recognized prior to invoicing, or deferred revenue (billings in excess of costs) when revenue is recognized subsequent to invoicing. Significant Judgments The Companys 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. Disaggregation of Revenue The Company generated revenue for the years ended June 30, 2025 and 2024 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. The Company currently generates its revenues primarily from customers in the United States. | 31 | | Revenue for a significant portion of Software Services projects and solutions (projects whereby, the development of the project leads to an identifiable asset with an alternative use to the Company) is recognized at the point of time in which the customer obtains control of the project, customer accepts delivery and confirms completion of the project. On rare occasions, the Company generates Software Services revenues are custom project solutions (projects whereby, the development of the custom project leads to an identifiable asset with no alternative use to the Company, and, in which, the Company also has an enforceable right to payment under the contract) and are therefore recognized based on the percentage of completion using an input model with a master budget. 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 Licenses is recognized at the point of time in which the Company delivers the software and customer accepts delivery. Software Licenses often include third party components that are a fully integrated part of the Software License stack and are therefore considered as one deliverable and performance obligation. 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. **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. The Company values the options using the Black-Scholes Merton (Black Scholes) method utilizing various inputs such as expected term, expected volatility and the risk-free rate. The expected term reflects the application of the simplified method, which is the weighted average of the contractual term of the grant and the vesting period for each tranche. Expected volatility is based upon historical volatility for a rolling previous years trading days of the Companys common stock. The risk-free rate is based on the implied yield of U.S. Treasury notes as of the grant date with a remaining term approximately equal to the expected life of the award. **Research and Development Costs** Research and development expenses are expensed as incurred, and include payroll, employee benefits and stock-based compensation expense. Research and development expenses also include third-party development and programming costs. Given the emerging industry and uncertain market environment the Company operates in, research and development costs are not capitalized. | 32 | | **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. The amendments are effective for the Companys annual periods beginning July 1, 2025. The Company is currently evaluating the ASU to determine its impact on the Companys disclosures. **Highlights** **RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2025 AND 2024** **Summary P&L** **** | | | For the Years Ended | | | | | | | | | | | | June 30, | | | Change | | | | | | 2025 | | | 2024 | | | $ | | | % | | | | | | (in millions) | | | | | | | | | | | | Revenue | | $ | 10.53 | | | $ | 8.80 | | | $ | 1.73 | | | | 20 | % | | | Cost of Goods Sold | | | 3.41 | | | | 2.94 | | | | 0.47 | | | | 16 | % | | | Gross Profit | | | 7.12 | | | | 5.86 | | | | 1.26 | | | | 22 | % | | | Total Operating Expenses | | | 9.86 | | | | 12.47 | | | | (2.61 | ) | | | -21 | % | | | Loss from Operations before Other Income | | | (2.74 | ) | | | (6.61 | ) | | | 3.87 | | | | 59 | % | | | Other Income | | | 0.19 | | | | 0.22 | | | | (0.03 | ) | | | -14 | % | | | Net Loss | | $ | (2.55 | ) | | $ | (6.39 | ) | | $ | 3.84 | | | | 60 | % | | **Revenue** **** | | | For the Years Ended | | | | | | | | | | | | June 30, | | | Change | | | | | | 2025 | | | 2024 | | | $ | | | % | | | | | | (in millions) | | | | | | | | | | Software Services | | $ | 10.00 | | | $ | 8.13 | | | $ | 1.87 | | | | 23 | % | | | Software License/Software as a Service | | | 0.51 | | | | 0.67 | | | | (0.16 | ) | | | -24 | % | | | Royalty Income | | | 0.02 | | | | - | | | | 0.02 | | | | 100 | % | | | Total Revenue | | $ | 10.53 | | | $ | 8.80 | | | $ | 1.73 | | | | 20 | % | | Total revenue for the year ended June 30, 2025 was approximately $10.53 million compared to approximately $8.80 million for the year ended June 30, 2024, an increase of approximately 20%. The increase primarily represents the addition of new Spatial Core customers, which was offset by the runoff of certain heritage VR/AR customers reflecting our Strategic Shift. We break out our revenues into three categories - Software Services, Software License and Royalty Income. | | | 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). | | | | | | | | | | Royalty Income represents a percentage of revenue from divested subsidiaries pursuant to the respective divesture agreements. | | | 33 | | For the year ended June 30, 2025, Software Services revenue was approximately $10.0 million compared to approximately $8.13 million for the year ended June 30, 2024, an increase of approximately 23%. The increase represents the addition of new Spatial Core customers, offset by the runoff of certain heritage VR/AR customers reflecting our Strategic Shift. For the year ended June 30, 2025, Software License revenue was approximately $0.51 million compared to approximately $0.67 million for the year ended June 30, 2024, a decrease of approximately 24% driven by the divestiture of the QReal business. **Gross Profit** **** | | | For the Years Ended | | | | | | | | | | | | June 30, | | | Change | | | | | | 2025 | | | 2024 | | | $ | | | % | | | | | | (in millions) | | | | | | | | | | Revenue | | $ | 10.53 | | | $ | 8.80 | | | $ | 1.73 | | | | 20 | % | | | Cost of Goods Sold | | | 3.41 | | | | 2.94 | | | | 0.47 | | | | 16 | % | | | Gross Profit | | | 7.12 | | | | 5.86 | | | | 1.26 | | | | 22 | % | | | Gross Profit Margin | | | 68 | % | | | 67 | % | | | | | | | | | | **** Gross profit margin was approximately 68% for the year ended June 30, 2025 compared to approximately 67% for the year ended June 30, 2024, an increase of approximately 1%. The increase reflects increased margin on Spatial Core revenue driven by less reliance on third party vendors. **Operating Expenses** | | | For theYears Ended | | | | | | | | | | | | June 30, | | | Change | | | | | | 2025 | | | 2024 | | | $ | | | % | | | | | | (in millions) | | | | | | | | | | Research and development expenses | | $ | 3.49 | | | $ | 5.45 | | | $ | (1.96 | ) | | | -36 | % | | | General and administrative expenses | | | 3.64 | | | | 4.29 | | | | (0.65 | ) | | | -15 | % | | | Sales and marketing expenses | | | 2.20 | | | | 2.82 | | | | (0.62 | ) | | | -22 | % | | | Amortization of acquisition intangible assets | | | 0.43 | | | | 1.24 | | | | (0.81 | ) | | | -65 | % | | | Goodwill impairment | | | - | | | | 0.38 | | | | (0.38 | ) | | | -100 | % | | | Intangible asset impairment | | | - | | | | 2.56 | | | | (2.56 | ) | | | -100 | % | | | Change in fair value of acquisition contingent consideration | | | 0.10 | | | | (4.27 | ) | | | 4.37 | | | | -102 | % | | | Total Operating Expenses | | $ | 9.86 | | | $ | 12.47 | | | $ | (2.61 | ) | | | -21 | % | | Operating expenses for the year ended June 30, 2025 were approximately $9.86 million compared to approximately $12.47 million for the year ended June 30, 2024, a decrease of approximately 21%. Excluding the change in fair value of acquisition contingent consideration and intangible asset impairment, operating expenses decreased approximately 29% for the year ended June 30, 2025 compared to the year ended June 30, 2024. The decrease reflects our Strategic Shift, divestiture of the QReal business and reduction in non-core businesses. | 34 | | Research and Development Research and development expenses (primarily representing headcount related costs) for the year ended June 30, 2025 were approximately $3.49 million compared to approximately $5.45 million for the year ended June 30, 2024 a decrease of approximately 36%. The decrease reflects the divestiture of the QReal business, more efficient use of headcount (portion that is allocated to cost of goods sold) and other headcount reductions as part of our Strategic Shift. General and Administrative General and administrative expenses (primarily representing headcount and administrative related costs) for the year ended June 30, 2025 were approximately $3.64 million compared to approximately $4.29 million for the year ended June 30, 2024, a decrease of approximately 15%. The decrease reflects the divestiture of the QReal business and certain corporate administrative cost reductions. Sales and Marketing Sales and marketing expenses (primarily representing headcount, including incentive based, related costs) for the year ended June 30, 2025 were approximately $2.20 million compared to approximately $2.82 million for the year ended June 30, 2024, a decrease of approximately 22%. The decrease reflects the divestiture of the QReal business and other headcount reductions as part of our Strategic Shift, partially offset by an increase in revenue related incentive pay. Amortization of Acquisition Intangible Assets Amortization of acquisition intangible assets expense for the year ended June 30, 2025 was approximately $0.43 million compared to approximately $1.24 million for the year ended June 30, 2024, a decrease of approximately 65%. The decrease is attributable to the write off of BLI intangible assets legacy customer relationships in June 2024. Goodwill Impairment Goodwill impairment for the year ended June 30, 2025 was none compared to approximately $0.38 million in the previous year. The 2024 impairment represents the write off of goodwill from the divestiture of PulpoAR. Intangible Asset Impairment Intangible asset impairment for the year ended June 30, 2025 was none compared to approximately $2.56 million in the previous year. The 2024 impairment primarily represents the write off of BLI legacy customer relationships unamortized balance at June 30, 2024. This was driven by the Strategic Shift, which resulted in a significant turnover in BLIs customer base that existed at the acquisition date. The 2024 impairment also includes the impairment of PulpoAR - technology unamortized balance due to PulpoARs divestiture. Change in Fair Value of Acquisition Contingent Consideration Change in fair value of acquisition contingent consideration for the year ended June 30, 2025 was an expense of approximately $0.10 million compared to a gain of approximately $4.27 million for the year ended June 30, 2024. The expense in 2025 represents the change in the time value of money related to the present value of future consideration payments related to the BLI acquisition. The gain in 2024 represents a decrease in contingent consideration liabilities driven by revisions to revenue forecasts for BLI and Sector 5 Digital LLC (S5D) and a decrease in the common stock price of Glimpse (a portion of potential contingent consideration was payable in stock) between measurement dates. **Other Income** Other income for the years ended June 30, 2025 and 2024 were approximately $0.19 million and $0.22, respectively. This represents interest income and reflects the timing of changes in cash equivalent balances and changes in short term interest rates. | 35 | | **Net loss** For the year ended June 30, 2025, we incurred a net loss of approximately $2.55 million compared to a net loss of approximately $6.39 million for the year ended June 30, 2024, an improvement of approximately $3.84 million. Excluding the changes in fair value of acquisition contingent consideration and intangible asset impairment (see Operating Expenses section above), the losses for the years ended June 30 2025 and 2024 were approximately $2.45 million and approximately $7.72 million, respectively, an approximate $5.27 million improvement in 2025. The reduction in loss reflects increased revenue/gross profit combined with expense reductions reflective of our Strategic Shift, divestiture of the QReal business and reduction in non-core businesses. **Non-GAAP Financial Measures** The following discussion and analysis includes both financial measures in accordance with GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a companys performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to, net income (loss), operating income (loss), and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of the Company nor are they intended to be predictive of potential future results. 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. Our management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the described excluded items. The Company defines Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table below. Adjusted EBITDA is an important measure of our operating performance because it allows management, investors and analysts to evaluate and assess our core operating results from period to period after removing the impact of items of a non-operational nature that affect comparability. We have included a reconciliation of our financial measures calculated in accordance with GAAP to the most comparable non-GAAP financial measures. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between the Company and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. 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. The following table presents a reconciliation of net loss to Adjusted EBITDA loss for the years ended June 30, 2025 and 2024: | | | For the Years Ended | | | | | | June 30, | | | | | | 2025 | | | 2024 | | | | | | (in millions) | | | | Net loss | | $ | (2.55 | ) | | $ | (6.39 | ) | | | Depreciation and amortization | | | 0.51 | | | | 1.36 | | | | EBITDA loss | | | (2.04 | ) | | | (5.03 | ) | | | Stock based compensation expenses | | | 0.99 | | | | 2.28 | | | | Loss on subsidiary divestiture | | | 0.11 | | | | - | | | | Gain on lease termination | | | (0.03 | ) | | | - | | | | Change in fair value of acquisition contingent consideration | | | 0.10 | | | | (4.27 | ) | | | Intangible asset impairment | | | - | | | | 2.94 | | | | Change in fair value of accrued performance bonus | | | - | | | | (0.55 | ) | | | Adjusted EBITDA loss | | $ | (0.87 | ) | | $ | (4.63 | ) | | | 36 | | Adjusted EBITDA loss for the year ended June 30, 2025 was approximately $0.87 million compared to approximately $4.63 million for the comparable 2024 period. The improvement is driven by increased revenue/gross profit combined with expense reductions reflective of our Strategic Shift, divestiture of the QReal business and reduction in non-core businesses. **Liquidity and Capital Resources** | | | For the Years Ended | | | | | | | | | | | | June 30, | | | Change | | | | | | 2025 | | | 2024 | | | $ | | | % | | | | | | (in millions) | | | | | | | | | | Net cash used in operating activities | | $ | (0.27 | ) | | $ | (5.21 | ) | | $ | 4.94 | | | | 95 | % | | | Net cash used in investing activities | | | (1.54 | ) | | | (1.53 | ) | | | (0.01 | ) | | | -1 | % | | | Net cash provided by financing activities | | | 6.80 | | | | 2.97 | | | | 3.83 | | | | 129 | % | | | Net increase (decrease) in cash and cash equivalents | | | 4.99 | | | | (3.77 | ) | | | 8.76 | | | | NA | | | | Cash and cash equivalents, beginning of year | | | 1.84 | | | | 5.61 | | | | (3.77 | ) | | | -67 | % | | | Cash and cash equivalents, end of year | | $ | 6.83 | | | $ | 1.84 | | | $ | 4.99 | | | | 271 | % | | **Operating activities** Net cash used in operating activities for the year ended June 30, 2025 was approximately $0.27 million, compared to approximately $5.21 million for the year ended June 30, 2024. The significant improvement is driven by increased revenue/gross profit combined with expense reductions reflective of our Strategic Shift, divestiture of the QReal business and reduction in non-core businesses. **Investing activities** Net cash used in investing activities for the year ended June 30, 2025 was approximately $1.54 million compared to approximately $1.53 million for the year ended June 30, 2024. For both years this primarily represented contingent consideration payments for the BLI acquisition based on achieved revenue milestones. **Financing activities** Cash flow provided by financing activities during the year ended June 30, 2025 was approximately $6.80 million, compared to approximately $2.97 million for the prior period. 2025 represents the net proceeds of the securities purchase agreement in December 2024. 2024 represents the net proceeds of the common stock purchase agreement in October 2023. | 37 | | **Capital Resources** As of June 30, 2025, the Company had cash and cash equivalents of $6.83 million, plus $0.84 million of accounts receivable. As of June 30, 2025, the Company had no outstanding debt obligations. As of June 30, 2025, the Company had no issued and outstanding preferred stock. As of June 30, 2025, contingent consideration for acquisition liabilities represents a $1.50 million cash component, payable in calendar year 2025 based on BLI having achieved certain revenue milestones. This will be the final payment (cash or equity) due relating to the BLI acquisition. **Emerging Growth Company and Smaller Reporting Company Status** We are an emerging growth company, as defined in the JOBS Act. As 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. 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. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. 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 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 are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting common stock held by non-affiliates is $250 million or more measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If, as a result of our decision to reduce future disclosure, investors find our common stock less attractive, there may be a less active trading market for our common stock and the price of our common stock may be more volatile. | 38 | | **ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** Not applicable. **ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA** All financial information required by this Item is attached hereto at the end of this Report beginning on page F-1 and is hereby incorporated herein by reference. **ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE** As reported in the Current Report on Form 8-K filed by the Company with the SEC on December 21, 2023, Hoberman & Lesser, CPAs LLP (Hoberman) resigned as independent registered public accounting firm of the Company effective as of December 20, 2023. During the fiscal years ended June 30, 2023 and the subsequent interim period through December 20, 2023, there were no (i) disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and Hoberman on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Hoberman, would have caused it to make reference to the subject matter of such disagreements in connection with its reports on the Companys financial statements for such periods, or (ii) reportable events (as described in Item 304(a)(1)(v) of Regulation S-K). **ITEM 9A. CONTROLS AND PROCEDURES** **Evaluation of Disclosure Controls and Procedures** We maintain disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2025. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, we are required to apply judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. **Managements Report on Internal Control over Financial Reporting** Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on that assessment, our management concluded that our internal control over financial reporting was effective as of June 30, 2025 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with GAAP. **Changes in Internal Control over Financial Reporting** During the quarter ended June 30, 2025, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. **ITEM 9B. OTHER INFORMATION** None. **ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS** Not applicable. **** | 39 | | **** **PART III** **ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE** The following table sets forth information for our executive officers and directors, their ages (as of September 30, 2025) and position(s) with the Company. | Name | | Age | | Position | | | Executive Officers | | | | | | | Lyron Bentovim | | 56 | | President, Chief Executive Officer, Director and Chairman of the Board of Directors | | | Maydan Rothblum | | 52 | | Chief Financial Officer, Chief Operating Officer, Secretary and Director | | | David J. Smith | | 49 | | Chief Creative Officer | | | Tyler Gates | | 39 | | Chief Futurist Officer | | | Non-Executive Directors | | | | | | | Ian Charles | | 57 | | Independent Director | | | Jeff Enslin | | 58 | | Lead Independent Director | | | Lemuel Amen | | 59 | | Independent Director | | | Alexander Ruckdaeschel | | 53 | | Independent Director | | | Tamar Elkeles | | 56 | | Independent Director | | Our board of directors is divided into three classes, each containing as nearly as possible an equal number of directors. Our Class I directors are Ian Charles and Tamar Elkeles. Our Class II directors are Maydan Rothblum, Jeff Enslin and Alexander Ruckdaeschel. Our Class III directors are Lyron Bentovim and Lemuel Amen. Each class of directors is elected to a three year term expiring at the annual meeting of the stockholders of the Company held in such third year, and until their successors are elected. The current term of office of our Class II directors will expire at our 2025 annual meeting of stockholders, the term for our Class III directors expires at our 2026 annual meeting of stockholders, and the term of our Class I directors expires at our 2027 annual meeting of stockholders. Officers are elected and serve at the discretion of our board of directors. **Executive Officers** **Lyron Bentovim**has been our President and Chief Executive Officer, and the Chairman and a member of our board of directors since he co-founded the Company in 2016. From July 2014 to August 2015, Mr. Bentovim was Chief Operating Officer and Chief Financial Officer of Top Image Systems, a Nasdaq-listed company. From March 2013 to July 2014, Mr. Bentovim served as Chief Operating Officer and Chief Financial Officer of NIT Health and Chief Operating Officer and Chief Financial Officer and Managing Director at Cabrillo Advisors. From August 2009 until July 2012, Mr. Bentovim served as the Chief Operating Officer and Chief Financial Officer of Sunrise Telecom, Inc. a Nasdaq-listed company. Prior to Sunrise Telecom, Inc., from January 2002 to July 2009, Mr. Bentovim was a Portfolio Manager for Skiritai Capital LLC, an investment advisor. Prior to Skiritai Capital LLC, Mr. Bentovim served as the President, Chief Operating Officer and co-founder of WebBrix, Inc. Mr. Bentovim serves on the board of directors of Manhattan Bridge Capital, a Nasdaq-listed company, and has served on the board of directors of the following publicly traded companies: Blue Sphere, RTW Inc., Ault, Inc., Top Image Systems Ltd., Three-Five Systems Inc., Sunrise Telecom Inc., and Argonaut Technologies Inc. Additionally, Mr. Bentovim was a Senior Engagement Manager with strategy consultancies USWeb/CKS, Mitchell Madison Group LLC and McKinsey & Company Inc. Mr. Bentovim has an MBA from Yale School of Management and a law degree from the Hebrew University, Israel. We concluded that Mr. Bentovim should serve as a member of our board of directors based on his position as President and Chief Executive Officer of the Company, and our review of his experience, qualifications, attributes and skills, including co-founding our company and his executive leadership experience. | 40 | | **Maydan Rothblum**has been Chief Operating Officer and Chief Financial Officer since he co-founded the Company in 2016 and a member of our board of directors since July 2021. From 2004 to 2016, Mr. Rothblum served as the co-founder, Managing Director and Chief Operating Officer of Sigma Capital Partners, a middle-market private equity firm focused on making negotiated investments directly onto the balance sheets of, primarily, small-to-mid sized publicly traded technology companies. In addition to his role as principal investor, Mr. Rothblum oversaw the funds portfolio, managed the funds day-to-day operations and financial reporting. Prior to working at Sigma Capital Partners, Mr. Rothblum held positions at Apax Partners, a global private equity fund, and Booz, Allen & Hamilton, a global strategic consultancy. Additionally, Mr. Rothblum served as an Engineer for the Israel Defense Forces. Mr. Rothblum holds an MBA from Columbia Business School and a BS in Industrial Engineering and Management from the Technion - Israel Institute of Technology. We concluded that Mr. Rothblum should serve as a member of our board of directors based on is based on his position as Chief Financial Officer and Chief Operating Officer of the Company, and our review of his experience, qualifications, attributes and skills, including co-founding our Company, his executive leadership experience and his experience in the finance industry. **David J. Smith**has been the Chief Creative Officer since he co-founded the Company in 2016, and was a member of our board of directors from the Companys inception until December 2023. Since June 2016, Mr. Smith has served as the co-founder and Organizer of NYVR Meetup. Prior to co-founding the Company, Mr. Smith served as the Senior Project Manager at Avison Young, where he managed construction and real estate development projects. From April 2016 to August 2020, Mr. Smith was the Founder of VRTech Consulting LLC, which provided consulting for real estate development projects and virtual reality. Mr. Smith holds a B.S. in Civil Engineering from Pennsylvania State University. **Tyler Gates** has been the General Manager of Brightline Interactive, LLC (BLI) since August 1, 2022 and the Companys Chief Futurist Officer since August 1, 2022. Mr. Gates is also a non-voting board observer of our board of directors. Prior to the closing of our acquisition of BLI, Mr. Gates was the Chief Executive Officer of BLI, and has been with BLI in several executive leadership roles since 2012. Additionally, Mr. Gates served as the founding and former President of the VR/AR Association (VRARA) Washington DCs Chapter and was the former host of the VRARA Podcast. Mr. Gates holds a BA Degree in Corporate Communications and Interpersonal Psychology from Lenoir-Rhyne University. **Directors** Information regarding our executive officers who also serve as members of our board of directors are set forth in -Executive Officers above. The biographical description of each director below includes the specific experience, qualifications, attributes and skills that our board of directors considered in making a conclusion as to whether such person should serve as a member of our board. **Ian Charles** has served as a member of our board of directors since January 2022. Mr. Charles has approximately 25 years of executive leadership experience in technology, public markets, mergers and acquisitions, and multinational operations. To 2024, Mr. Charles served as the Chief Financial Officer of Filevine, a provider of legal SaaS solutions. From 2019 to 2021, Mr. Charles served as the Chief Financial Officer of Scoop Technologies, Inc., a workplace management software provider. From 2014 to 2019, Mr. Charles served as the Chief Financial Officer of Planful (formerly Host Analytics), a financial planning and analysis platform that provides financial planning, consolidation, reporting and analytics. **Jeff Enslin** has served as a member our board of directors since July 2018. From 1995 to 2018, Mr. Enslin was a senior partner and senior portfolio manager at Caxton Associates LP, a macro-focused hedge fund. Mr. Enslin is the founder and managing member of Perimetre Capital LLC since 2018, where he actively manages a wide portfolio of early stage technology investments. Mr. Enslin has served on the Investment Committees at Lehigh University (2010 to 2019) and the Peddie School (2010 to present, Advisory Trustee). Mr. Enslin is an active mentor at both Creative Destruction Labs and Endless Frontier Labs. Mr. Enslin received his MBA in finance and international business from New York Universitys Stern School of Business and his B.S. in Finance from Lehigh University. | 41 | | **Lemuel Amen** has served as a member of our board of directors since May 2021. Mr. Amen is the Founder and Chairman of Altius Manufacturing Group, LLC, an equity growth management firm, and has held senior executive positions and led global business units for Electronic Data Systems and 3M. Mr. Amen has served on the board of directors for a privately held technology firm, AbeTech Inc., since 2009, and on the board of advisors of a privately held industrial firm, Diversified Chemical Technology, Inc., since 2018. Additionally, Mr. Amen is an experienced board governance professional serving high-growth technology, industrial services, and application software firms. Prior board governance service positions include: Chairman of the board of directors for Viking Engineering and Development Inc. (2011 to 2017); board director and operating committee member for Bauer Welding & Metal Fabricators, Inc. (2013 to 2016); and board President and lead director for HighJump Software, Inc. (2005 to 2008). Mr. Amen served as Chairman for the Federal Reserve Bank of Minneapolis, Ninth District Advisory Council from 2012 to 2015. Additional governance and board director service post includes: University of Michigan - Dearborn, College of Business, Board of Advisors (2019 to present); State of Minnesota Governors Workforce Development Council (2016 to 2019); Ordway Center for the Performing Arts (2015 to 2018); Junior Achievement Worldwide Inc., Global Board of Directors (2003 to 2008); and Northwestern University, McCormick School of Engineering & Computer Science, Industrial Advisory Board (2000 to 2006). Mr. Amen earned his M.S. in Civil and Environmental Engineering from Northwestern University, and his B.S. in Mechanical Engineering at California State University-Northridge. **Alexander Ruckdaeschel**has served as a member of our board of directors since July 2021. Mr. Ruckdaeschel has worked in the financial industry for over 20 years in the United States and Europe as a co-founder, partner and senior executive. Since 2012 to June 2021, he served on the board of directors of Vuzix (Nasdaq: VUZI), a leading supplier of smart glasses and AR technology products and services and was the Chairman of Vuzixs compensation committee. Mr. Ruckdaeschel co-founded Herakles Capital Management and AMK Capital Advisors in 2008. He was also a partner with Alpha Plus Advisors and Nanostart AG, where he was the head of their U.S. group. Mr. Ruckdaeschel has significant experience in startup operations as the manager of DAC Nanotech-Fund and Biotech-Fund, and sits on several boards. Following service in the German military, Mr. Ruckdaeschel was a research assistant at Dunmore Management focusing on intrinsic value and identifying firms that were undervalued and had global scale potential. **Tamar Elkeles** has served as a member of our board of directors since April 2024. Dr. Elkeles has nearly 30 years of experience in the high technology industry. She was the Chief Learning Officer at Qualcomm from 1992 to 2015. Afterward, she served in senior executive positions at several technology companies and investment firms. Dr. Elkeles recently served on the board of directors of GP Strategies Corporation, an NYSE-listed company until its sale to Learning Technologies Group, a London Stock Exchange company. She currently serves on the Board of Directors of OpenSesame and on the Board of Advisors of the Forbes School of Business & Technology at The University of Arizona. Dr. Elkeles also serves as a strategic advisor to several start-up companies in the technology sector. She holds both an M.S. and Ph.D. in Organizational Psychology. **Family Relationships** No family relationships exist among any of our executive officers or directors. **Committees of Our Board of Directors** Our board of directors has established four standing committees: an audit committee, a compensation committee, a nominating and corporate governance committee, and a strategy committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time. **Audit Committee** Our audit committee consists of Ian Charles, Lemuel Amen and Jeff Enslin. The Chair of our audit committee is Ian Charles. Our board of directors has determined that each member of the audit committee (i) is independent as that term is defined in Nasdaq rules, (ii) meets the heightened independence requirements for audit committee members required under the Exchange Act and related SEC and Nasdaq rules, (iii) has sufficient knowledge in financial and auditing matters to serve on the audit committee, and (iv) can read and understand fundamental financial statements in accordance with applicable requirements. In addition, our board of directors has determined that Ian Charles is an audit committee financial expert within the meaning of SEC regulations. In arriving at these determinations, our board of directors has examined each audit committee members scope of experience and the nature of their employment. | 42 | | Our audit committee has a written charter. Our audit committee reviews and reassesses the adequacy of the written charter on an annual basis. The primary purpose of our audit committee is to provide assistance to the board of directors in fulfilling its oversight responsibility to our stockholders and others relating to (i) the integrity of the Companys financial statements, (ii) the effectiveness of the Companys internal control over financial reporting, (iii) the Companys compliance with legal and regulatory requirements, and (iv) the independent auditors qualifications and independence. Specific responsibilities of our audit committee include: | | | Reviewing and reassessing the charter at least annually and obtaining the approval of the board of directors; | | | | | | | | | | Reviewing and discussing quarterly and annual financial statements; | | | | | | | | | | Discussing the Companys policies on risk assessment and risk management; | | | | | | | | | | Discussing with the independent auditor the overall scope and plans for their audit, including the adequacy of staffing and budget or compensation; and | | | | | | | | | | Reviewing and approving related party transactions. | | **Compensation Committee** Our Compensation Committee consists of Alexander Ruckdaeschel, Lemuel Amen and Jeff Enslin. The Chair of our Compensation Committee is Alexander Ruckdaeschel. Our board of directors has affirmatively determined that each member of the Compensation Committee meets the additional independence criteria applicable to compensation committee members under Nasdaq and SEC rules. Our compensation committee has a written charter. Our compensation committee reviews and reassesses the adequacy of the written charter on an annual basis. The primary purpose of our compensation committee is to discharge the responsibilities of our board of directors with respect to all forms of compensation for the Companys executive officers and to administer the Companys equity incentive plan for employees. Specific responsibilities of our compensation committee include: | | | Reviewing and overseeing the Companys overall compensation philosophy, and overseeing the development and implementation of compensation programs aligned with the Companys business strategy; | | | | | | | | | | Determining the form and amount of compensation to be paid or awarded to the Chief Executive Officer and all other executive officers of the Company; | | | | | | | | | | Annually reviewing and approving all matters related to Chief Executive Officer compensation; | | | | | | | | | | Reviewing, adopting, amending, and terminating incentive compensation and equity plans, severance agreements, profit sharing plans, bonus plans, change-of-control protections, and any other compensatory arrangements for our executive officers and other senior management; and | | | | | | | | | | Reviewing and establishing general policies relating to compensation and benefits of our employees, including our overall compensation philosophy. | | | 43 | | **** **Nominating and Corporate Governance Committee** The members of our nominating and corporate governance committee are Tamar Elkeles, Jeff Enslin, Alexander Ruckdaeschel and Ian Charles. Tamar Elkeles serves as the Chairperson of the committee. Our nominating and corporate governance committee has a written charter. Our nominating and corporate governance committee reviews and reassesses the adequacy of the written charter on an annual basis. Our nominating and corporate governance committees responsibilities include: | | | identifying individuals qualified to become board members; | | | | | | | | | | recommending to our board of directors the persons to be nominated for election or appointed as directors and to each board committee; | | | | | | | | | | reviewing and recommending to our board of directors corporate governance principles, procedures and practices, and reviewing and recommending to our board of directors proposed changes to our corporate governance principles, procedures and practices from time to time; and | | | | | | | | | | reviewing and making recommendations to our board of directors with respect to the composition, size and needs of our board of directors. | | **** **Strategy Committee** The members of our strategy committee are Lemuel Amen, Alexander Ruckdaeschel, Jeff Enslin, Tamar Elkeles and Lyron Bentovim. Lemuel Amen serves as the Chairperson of the strategy committee. The strategy committees responsibilities include: | | | identifying strategic trends within the Company and industry; | | | | | | | | | | analyzing the potential strategic impact of various financial, operational, technological and M&A alternatives; and | | | | | | | | | | reviewing and making recommendations to our board of directors with respect to the Companys strategic directions. | | **Code of Ethics** We have adopted a written code of ethics and business conduct that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The code is updated periodically. While we make ministerial and technical amendments to the code from time to time, if we make any substantive amendments to, or grant any waivers from, the code for any officer or director, we will disclose the nature of such amendment or waiver in a current report on Form 8-K. **Director or Officer Involvement in Certain Legal Proceedings** To our knowledge, after reasonable inquiry, there are no events or involvements in legal proceedings requiring disclosure pursuant to Item 401(f) of Regulation S-K. **Section 16(a) Compliance** Section 16(a) of the Exchange Act requires our executive officers, directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater than ten-percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms furnished to us and the written representations from certain of the reporting persons that no other reports were required during the year ended June 30, 2025, all executive officers, directors and greater than ten-percent beneficial owners complied with the reporting requirements of Section 16(a). **** | 44 | | **** **Insider Trading Policy** We have adopted an insider trading policy that governs the purchase and sale or other dispositions of our securities by us, our directors, officers and employees, that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to us. A copy of our insider trading policy is incorporated by reference as Exhibit 19.1 to this Report. **ITEM 11. EXECUTIVE COMPENSATION** This section discusses the material components of our executive compensation program for our executive officers who are named in the Summary Compensation Table below. For the fiscal year ended June 30, 2025, our named executive officers and their positions were as follows: | | | Lyron Bentovim, President and Chief Executive Officer; | | | | | | | | | | Maydan Rothblum, Chief Financial Officer and Chief Operating Officer; and | | | | | | | | | | David J. Smith, Chief Creative Officer. | | **SUMMARY COMPENSATION TABLE** The following table represents information regarding the total compensation awarded to, earned by or paid to our named executive officers during the fiscal years ended June 30, 2025 and 2024: | Name and Principal Position | | Fiscal Year | | Salary | | | Bonus | | | Stock Awards ($) | | | Option Award(4)(5) | | | Total | | | | Lyron Bentovim(1) | | 2025 | | $ | 259,133 | | | $ | 120,000 | | | $ | - | | | $ | - | | | $ | 379,133 | | | | President and Chief Executive Officer | | 2024 | | $ | 265,000 | | | $ | - | | | $ | - | | | $ | 69,638 | | | $ | 334,638 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Maydan Rothblum(2) | | 2025 | | $ | 246,833 | | | $ | 100,000 | | | $ | - | | | $ | - | | | $ | 346,833 | | | | Chief Financial Officer and Chief Operating Officer | | 2024 | | $ | 235,000 | | | $ | - | | | $ | - | | | $ | 357,746 | | | $ | 592,746 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David J Smith(3) | | 2025 | | $ | 210,000 | | | $ | 10,000 | | | $ | - | | | $ | - | | | $ | 220,000 | | | | Chief Creative Officer | | 2024 | | $ | 210,000 | | | $ | - | | | $ | - | | | $ | 49,686 | | | $ | 259,686 | | | | (1) | In addition to serving as our President and Chief Executive Officer, Mr. Bentovim serves as the Chairman and a member of our board of directors but receives no additional compensation for his service on our board of directors. | | | | | | | (2) | In addition to serving as our Chief Financial Officer and Chief Operating Officer, Mr. Rothblum serves as a member of our board of directors but receives no additional compensation for his service on our board of directors. | | | | | | | (3) | In addition to serving as our Chief Creative Officer, Mr. Smith served as a member of our board of directors until December 15, 2023 but received no additional compensation for such service on our board of directors. | | | | | | | (4) | Fiscal year 2024 stock option awards were primarily in lieu of cancelation of previously issued and fully vested stock options. | | | | | | | (5) | We provide information regarding the assumptions used to calculate grant date fair value of our stock options in Note 10 to our audited consolidated financial statements included in this Report. | | | 45 | | **** **Employment Agreements** **Lyron Bentovim** We have entered into an executive employment agreement with Lyron Bentovim, which employment agreement shall continue until terminated by either us or Mr. Bentovim. Pursuant to Mr. Bentovims employment agreement, he receives an annual base cash salary of $297,000. In addition, Mr. Bentovim is eligible to receive performance bonuses as determined by our compensation committee. **Maydan Rothblum** We have entered into an executive employment agreement with Maydan Rothblum, which employment agreement shall continue until terminated by either us or Mr. Rothblum. Pursuant to Mr. Rothblums employment agreement, he receives an annual cash base salary of $263,400. In addition, Mr. Rothblum is eligible to receive performance bonuses as determined by our compensation committee. **David J. Smith** We have entered into an executive employment agreement with David J. Smith, which employment agreement shall continue until terminated by either us or Mr. Smith. Pursuant to Mr. Smiths employment agreement, he receives an annual cash base salary of $210,000. In addition, Mr. Smith is eligible to receive performance bonuses as determined by our Compensation Committee. **Equity Incentive Plan** In October 2016, our stockholders approved our Equity Incentive Plan, as amended (the Plan), which is administered by our compensation committee. Pursuant to the Plan, we are authorized to grant options and other equity awards to employees of the Company, non-employee directors or key consultants to the Company and any person who has been offered employment by the Company, provided that such prospective employee may not receive any payment or exercise any right relating to an award until such person has commenced employment with the Company (the Eligible Persons). The purchase price of each share of common stock purchasable under an award issued pursuant to the Plan, shall be determined by our compensation committee, in its sole discretion, at the time of grant, but shall not be less than 100% of the fair market of such share of common stock on the date the award is granted, subject to adjustment. Our compensation committee also has sole authority to set the terms of all awards at the time of grant. Pursuant to the Plan, a maximum of 10,000,000 shares of our common stock shall be set aside and reserved for issuance. In addition, subject to adjustment as provided in the Plan, the share reserve will automatically increase on January 1 of each calendar year until (and including) January 1, 2030 (each, an Evergreen Date) in an amount equal to 5% of the total number of shares of our common stock outstanding on the December 31st immediately preceding the applicable Evergreen Date (the Evergreen Increase). Notwithstanding the foregoing, our board of directors may act prior to the Evergreen Date of a given year to provide that there will be no Evergreen Increase for such year, or that the Evergreen Increase for such year will be a lesser number of shares of our common stock than would otherwise occur pursuant to the preceding sentence. Any common stock delivered under the Plan shall consist of authorized and unissued shares or treasury shares. Pursuant to these provisions, effective January 1, 2025 the number of shares of our common stock set aside for the Plan automatically increased to a total of approximately 13.17 million. As of June 30, 2025, there were approximately 7.40 million shares available for issuance under the Plan. | 46 | | Under the Plan, an Eligible Person may be granted options, stock appreciation rights, restricted stock, phantom stock, sale phantom stock, stock granted as a bonus, a performance award, other stock-based awards or an annual incentive award, together with any related right or interest. The term of each award under the Plan shall be for such period as may be determined by our compensation committee, subject to the express limitations set forth in the Plan. Unless earlier terminated by our board of directors, the Plan will remain in effect until such time as no shares of common stock remain available for delivery under the Plan and the Company has no further rights or obligations under the Plan with respect to outstanding awards under the Plan. **Outstanding Equity Awards at Fiscal Year-End** The following table discloses information regarding outstanding equity awards granted or accrued as of June 30, 2025, for our named executive officers. | Outstanding Equity Awards | | | | | Option Awards | | | Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price | | | Option Expiration Date | | | Lyron Bentovim | | | 60,500 | | | | 60,500 | | | $ | 7.00 | | | 2/15/2033 | | | | | | 24,051 | | | | - | | | $ | 3.00 | | | 3/1/2031 | | | | | | - | | | | 24,051 | | | $ | 2.50 | | | 3/1/2031 | | | | | | - | | | | 24,051 | | | $ | 2.00 | | | 3/1/2031 | | | | | | - | | | | 1,089,000 | | | $ | 7.00 | | | 2/15/2033 | | | | | | | | | | | | | | | | | | | | Maydan Rothblum | | | 3,805 | | | | - | | | $ | 7.00 | | | 2/15/2033 | | | | | | 34,695 | | | | 38,500 | | | $ | 7.00 | | | 2/15/2033 | | | | | | 97,812 | | | | 152,188 | | | $ | 1.50 | | | 3/1/2034 | | | | | | 729 | | | | - | | | $ | 3.00 | | | 3/1/2031 | | | | | | 17,986 | | | | - | | | $ | 3.00 | | | 3/1/2031 | | | | | | - | | | | 875 | | | $ | 2.50 | | | 3/1/2031 | | | | | | - | | | | 17,840 | | | $ | 2.50 | | | 3/1/2031 | | | | | | - | | | | 1,094 | | | $ | 2.00 | | | 3/1/2031 | | | | | | - | | | | 17,621 | | | $ | 2.00 | | | 3/1/2031 | | | | | | - | | | | 693,000 | | | $ | 7.00 | | | 2/15/2033 | | | | | | | | | | | | | | | | | | | | D.J. Smith | | | 11,000 | | | | 11,000 | | | $ | 7.00 | | | 2/15/2033 | | | | | | 17,160 | | | | - | | | $ | 3.00 | | | 3/1/2031 | | | | | | - | | | | 17,160 | | | $ | 2.50 | | | 3/1/2031 | | | | | | - | | | | 17,160 | | | $ | 2.00 | | | 3/1/2031 | | | | | | - | | | | 198,000 | | | $ | 7.00 | | | 2/15/2033 | | **** | 47 | | **** **DIRECTOR COMPENSATION** Because we are still in the development stage, our directors do not receive any cash compensation other than reimbursement for expenses incurred during the performance of their duties or their separate duties as officers of the Company. The following table sets forth information concerning equity-based compensation for the fiscal year ended June 30, 2025 of our directors serving at such time who are not also named executive officers. | Name | | Fiscal Year | | | Option Options (1) | | | Stock Awards ($) | | | Total ($) | | | | Jeffrey Enslin | | | 2025 | | | $ | 81,788 | | | $ | - | | | $ | 81,788 | | | | | | | | | | | | | | | | | | | | | | | Lemuel Amen | | | 2025 | | | $ | 81,788 | | | $ | - | | | $ | 81,788 | | | | | | | | | | | | | | | | | | | | | | | Alexander Ruckdaeschel | | | 2025 | | | $ | 81,788 | | | $ | - | | | $ | 81,788 | | | | | | | | | | | | | | | | | | | | | | Ian Charles | | | 2025 | | | $ | 81,788 | | $ | - | | | $ | 81,788 | | | | | | | | | | | | | | | | | | | | | | Tamar Elkeles | | | 2025 | | | $ | 81,788 | | $ | - | | | $ | 81,788 | | | | (1) | The amounts disclosed represent the approximate aggregate grant date fair value of stock options granted to our directors during fiscal year ended June 30, 2025 under the Plan. The assumptions used to compute the fair value are disclosed in Note 10 to our audited financial statements included in this Report. Such grant date fair values do not take into account any estimated forfeitures related to service-vesting conditions. These amounts do not reflect the actual economic value that will be realized by the named director upon the vesting of the stock options, the exercise of the stock options, or the sale of common stock acquired under such stock options. | | **Risk Management** The Company does not believe risks arising from its compensation policies and practices for its employees are reasonably likely to have a material adverse effect on the Company. **ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.** **SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT** Except as otherwise indicated below, the following table sets forth certain information regarding beneficial ownership of our common stock as of September 22, 2025 by: | | | Each of our current directors; | | | | | each of our named executive officers; | | | | | each person or group of affiliated persons known to us to be the beneficial owner of more than 5% of our common stock; and | | | | | all of our directors and executive officers as a group. | | | 48 | | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the securities. Common stock issuable upon the exercise, conversion or settlement of options, warrants, restricted stock units or other rights to acquire common stock that are currently exercisable, convertible or subject to settlement, or exercisable, convertible or subject to settlement within 60 days of September 30, 2025 are deemed to be outstanding and beneficially owned by the holder for the purpose of computing share and percentage ownership of that holder, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to the table below, and subject to community property laws where applicable, we believe the persons and entities named in the table below have sole voting and investment power with respect to all common stock shown as beneficially owned by them. Unless otherwise indicated, the address of each of the individuals and entities named below is c/o The Glimpse Group, Inc., 15 West 38th St., 12th Floor, New York, NY 10018. The percentage of shares beneficially owned is computed on the basis of 21,066,006 shares of common stock outstanding as of September 26, 2025. | Name of Beneficial Owner | | Common Stock Beneficially Owned | | | Percentage of Common Stock Owned | | | | | | | | | | | | | Directors and Officers: | | | | | | | | | | | | | | | | | | | | | | Lyron L. Bentovim | | | | | | | | | | | President, Chief Executive Officer and Chairman of the Board | | | 1,149,102 | (1) | | | 5.43 | % | | | | | | | | | | | | | | Maydan Rothblum | | | | | | | | | | | Chief Operating Officer, Chief Financial | | | | | | | | | | | Officer, Secretary and Treasurer, and Director | | | 652,345 | (2) | | | 3.07 | % | | | | | | | | | | | | | | D.J. Smith | | | | | | | | | | | Chief Creative Officer and Director | | | 1,030,708 | (3) | | | 4.89 | % | | | | | | | | | | | | | | Jeff Enslin | | | | | | | | | | | Director | | | 369,780 | (4) | | | 1.75 | % | | | | | | | | | | | | | | Lemuel Amen | | | | | | | | | | | Director | | | 182,497 | (5) | | | 0.86 | % | | | | | | | | | | | | | | Alexander Ruckdaeschel | | | | | | | | | | | Director | | | 83,264 | (6) | | | 0.39 | % | | | | | | | | | | | | | | Ian Charles | | | | | | | | | | | Director and Chair of Audit Committee | | | 78,850 | (7) | | | 0.37 | % | | | | | | | | | | | | | | Tamar Elkeles | | | | | | | | | | | Director | | | 54,375 | (8) | | | 0.26 | % | | | | | | | | | | | | | | All officers and directors (8 persons) | | | 3,600,921 | | | | 16.69 | % | | (1) Includes: 1,064,551 shares of common stock, of which 1,001,945 shares are owned by Darklight Partners LLC (an entity owned and managed by Mr. Bentovim) and fully vested options to purchase 84,551 shares of common stock. (2) Includes: 486,450 shares of common stock, 155,027 fully vested options and 10,868 options that vest within 60 days. An additional 3,528 shares of common stock are held by Mr. Rothblums mother. (3) Includes: 1,002,298 shares of common stock owned by VRTech Consulting LLC (an entity owned and managed by Mr. Smith) and fully vested options to purchase 28,160 shares of common stock. (4) Includes: 332,405 shares of common stock owned by Perimetre Capital, LLC (an entity owned and managed by Mr. Enslin), 28,125 fully vested options and 6,250 options that vest within 60 days. (5) Includes: 148,122 shares of common stock, 28,125 fully vested options and 6,250 options that vest within 60 days. (6) Includes: 48,889 shares of common stock, 28,125 fully vested options and 6,250 options that vest within 60 days. (7) Represents 72,600 fully vested options and 6,250 options that vest within 60 days. (8) Represents 48,125 fully vested options and 6,250 options that vest within 60 days. | 49 | | **ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE** **Related Party Transactions** None. **Director Independence** Our board of directors evaluates the independence of each member of our board of directors in accordance with the listing rules of Nasdaq (the Nasdaq Listing Rules). Pursuant to these rules, a majority of our board of directors must be independent directors within the meaning of the Nasdaq Listing Rules, and all directors who sit on our audit committee, nominating and corporate governance committee and compensation committee must also be independent directors. The Nasdaq definition of independence includes a series of objective tests, such as the director or director nominee is not, and was not during the last three years, an employee of the Company or our entities and has not received certain payments from, or engaged in various types of business dealings with us. In addition, as further required by the Nasdaq Listing Rules, our board of directors has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our board of directors, would interfere with such individuals exercise of independent judgment in carrying out his or her responsibilities as a director. In making these determinations, our board of directors reviewed and discussed information provided by the directors with regard to each directors business and personal activities as they may relate to the Company and its management. As a result, our board of directors has affirmatively determined that each of Ian Charles, Lemuel Amen, Alexander Ruckdaeschel, Tamar Elkeles and Jeff Enslin, is independent in accordance with the Nasdaq Listing Rules. Our board of directors has also affirmatively determined that each member of our audit committee, nominating and corporate governance committee and compensation committee is an independent director. **ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES** **Audit Fees** The following is a summary of the fees billed or expected to be billed to us for professional services rendered by our current auditors with respect to the fiscal years ended June 30, 2025 and 2024: | | | For the Year Ended | | | | | | June 30, | | | | | | 2025 | | | 2024 | | | | Audit fees | | $ | 128,000 | | | $ | 108,000 | | | | Audit fees - benefit plan | | | 16,000 | | | | 20,000 | | | | Tax fees | | | 14,000 | | | | 13,000 | | | | | | | | | | | | | | | Total Fees | | $ | 158,000 | | | $ | 141,000 | | | Audit Fees represent fees for respective fiscal year audits, including the review of our quarterly financial statements. **Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors** Our board of directors has adopted a policy governing the pre-approval by the audit committee of all services, audit and non-audit, to be provided to our Company by our independent auditors. Under the policy, the audit committee has pre-approved the provision by our independent auditors of specific audit, audit related, tax and other non-audit services as being consistent with auditor independence. Requests or applications to provide services that require the specific pre-approval of the audit committee must be submitted to the audit committee by the independent auditors, and the independent auditors must advise the board of directors as to whether, in the independent auditors view, the request or application is consistent with the SECs rules on auditor independence. The audit committee has considered the nature and amount of the fees billed by Turner, Stone & Company, L.L.P. and believes that the provision of the services for activities unrelated to the audit is compatible with maintaining the independence of Turner, Stone & Company, L.L.P. | 50 | | **PART IV** **ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES** | (a) | The following documents are filed as part of this Report: | | | | | | | (1) | Financial Statements | | See Index to Consolidated Financial Statements beginning on Page F-1 of this Report. | (2) | Financial Statement Schedules | | All financial statement schedules have been omitted since the required information was not applicable or was not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements or the accompanying notes. | (3) | Exhibits | | The exhibits listed in the following Index to Exhibits are filed, furnished or incorporated by reference as part of this Report. | Exhibit No. | | Exhibit Description | | | 3.1 | | Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 3 to the Companys Registration Statement on Form S-1 filed with the SEC on June 14, 2021). | | | | | | | | 3.2 | | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Amendment No. 5 to the Companys Registration Statement on Form S-1 filed with the SEC on June 23, 2021). | | | | | | | | 4.1 | | Description of Securities (incorporated by reference to Exhibit 4.1 of the Registrants Annual Report on Form 10-K filed with the SEC on September 30, 2024). | | | | | | | | 10.1 | | Amended and Restated 2016 Incentive Plan (incorporated by reference to Exhibit 10.1 to Amendment No. 3 to the Companys Registration Statement on Form S-1 filed with the SEC on June 14, 2021), | | | | | | | | 10.2 | | Employment Agreement dated May 13, 2021 by and between the Company and Lyron Bentovim (incorporated by reference to Exhibit 10.25 to Amendment No. 3 to the Companys Registration Statement on Form S-1 filed with the SEC on June 14, 2021). | | | | | | | | 10.3 | | Employment Agreement dated May 13, 2021 by and between the Company and Maydan Rothblum (incorporated by reference to Exhibit 10.26 to Amendment No. 3 to the Companys Registration Statement on Form S-1 filed with the SEC on June 14, 2021). | | | | | | | | 10.4 | | Employment Agreement dated May 13, 2021 by and between the Company and David J. Smith (incorporated by reference to Exhibit 10.27 to Amendment No. 3 to the Companys Registration Statement on Form S-1 filed with the SEC on June 14, 2021). | | | | | | | | 10.5 | | Executive Employment Agreement dated August 1, 2022 by and between the Company and Tyler Gates (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on August 2, 2022). | | | 51 | | | 10.6 | | Bentovim Option Agreement, dated February 15, 2023 (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on February 16, 2023). | | | | | | | | 10.7 | | Rothblum Option Agreement, dated February 15, 2023 (incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on February 16, 2023). | | | | | | | | 10.8 | | Smith Option Agreement, dated February 15, 2023 (incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed with the SEC on February 16, 2023). | | | | | | | | 10.9 | | Sales Agreement, dated July 11, 2025, between The Glimpse Group, Inc. and WestPark Capital, Inc. (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed with the SEC on July 11, 2025). | | | | | | | | 14.1 | | Code of Ethics (incorporated by reference to Exhibit 14.1 to the Companys Amendment No. 3 to the Registration Statement filed with the SEC on June 14, 2021). | | | | | | | | 16.1 | | Letter to SEC regarding Change in Certifying Accountant, dated December 21, 2023 (incorporated by reference to Exhibit 16.1 to the Companys Current Report on Form 8-K filed with the SEC on December 21, 2023). | | | | | | | | 19.1 | | Insider Trading Policy (incorporated by reference to Exhibit 19.1 of the Registrants Annual Report on Form 10-K filed with the SEC on September 30, 2024). | | | | | | | | 21.1 | | List of Subsidiaries. | | | | | | | | 23.1 | | Consent of Independent Registered Public Accounting Firm. | | | | | | | | 31.1 | | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended. | | | | | | | | 31.2 | | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended. | | | | | | | | 32.1 | | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) or 15d-14(b) under the Securities Exchange Act of 1934, as amended. | | | | | | | | 97.1 | | The Glimpse Group, Inc. Policy Relating to the Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1 of the Registrants Annual Report on Form 10-K filed with the SEC on September 30, 2024). | | | | | | | | 101.INS | | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | | | | | | | | 101.SCH | | Inline XBRL Taxonomy Extension Schema Document. | | | | | | | | 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | | | | | | | | 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. | | | | | | | | 101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. | | | | | | | | 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | | | | | | | | 104 | | Cover Page Interactive Data File (formatted in Inline XBRL and included in Exhibit 101) | | Indicates management contract or compensatory plan or arrangement. **ITEM 16. FORM 10-K SUMMARY** None. | 52 | | SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | | THE GLIMPSE GROUP, INC. | | | September 29, 2025 | | | | | | By: | /s/ Lyron Bentovim | | | | | Lyron Bentovim | | | | | President and Chief Executive Officer | | Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | Date | | Name and Title | | Signature | | | | | | | | | | September 29, 2025 | | Lyron Bentovim | | /s/ Lyron Bentovim | | | | | President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) | | | | | | | | | | | | September 29, 2025 | | Maydan Rothblum | | /s/ Maydan Rothblum | | | | | Chief Financial Officer, Chief Operating Officer and Director (Principal Financial Officer and Principal Accounting Officer) | | | | | | | | | | | | September 29, 2025 | | Jeff Enslin | | /s/ Jeff Enslin | | | | | Director | | | | | | | | | | | | September 29, 2025 | | Lemuel Amen | | /s/ Lemuel Amen | | | | | Director | | | | | | | | | | | | September 29, 2025 | | Alexander Ruckdaeschel | | /s/ Alexander Ruckdaeschel | | | | | Director | | | | | | | | | | | | September 29, 2025 | | Ian Charles | | /s/ Ian Charles | | | | | Director | | | | | | | | | | | | September 29, 2025 | | Tamar Elkeles | | /s/ Tamar Elkeles | | | | | Director | | | | | 53 | | **** **THE GLIMPSE GROUP, INC.** **CONSOLIDATED FINANCIAL STATEMENTS** **FOR THE YEARS ENDED JUNE 30, 2025 AND 2024** **** | | | **** THE GLIMPSE GROUP, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | | Page | | | Index to Consolidated Financial Statements | | | | Report of Independent Registered Public Accounting Firm (PCAOB ID: 76) | F-2 | | | Consolidated Balance Sheets | F-3 | | | Consolidated Statements of Operations | F-4 | | | Consolidated Statements of Stockholders Equity | F-5 | | | Consolidated Statements of Cash Flows | F-6 | | | Notes to Consolidated Financial Statements | F-7- F-27 | | | F-1 | | **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** *Your Vision Our Focus* * To the Board of Directors and Stockholders of The Glimpse Group, Inc. **Opinion on the Financial Statements** **** We have audited the accompanying consolidated balance sheets of The Glimpse Group, Inc. and its subsidiaries (the Company) as of June 30, 2025 and 2024, and the related consolidated statements of operations, stockholders equity, and cash flows for each of the years then, and the related notes to the consolidated financial statements (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. **** **Basis for Opinion** **** These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. | /s/ Turner, Stone & Company, L.L.P. | | | | Turner, Stone and Company, L.L.P. | | | | Dallas, Texas | | | September 29, 2025 | | | | | | | | We have served as the Companys auditor since 2023. | | | | F-2 | | **THE GLIMPSE GROUP, INC.** **CONSOLIDATED BALANCE SHEETS** | | | As of June 30, 2025 | | | As of June 30, 2024 | | | | ASSETS | | | | | | | | | | | Cash and cash equivalents | | $ | 6,832,725 | | | $ | 1,848,295 | | | | Accounts receivable | | | 840,551 | | | | 723,032 | | | | Deferred costs | | | 48,971 | | | | 170,781 | | | | Notes receivable | | | 160,600 | | | | - | | | | Prepaid expenses and other current assets | | | 289,810 | | | | 778,181 | | | | Total current assets | | | 8,172,657 | | | | 3,520,289 | | | | | | | | | | | | | | | Equipment and leasehold improvements, net | | | 54,898 | | | | 167,325 | | | | Right-of-use assets, net | | | 122,094 | | | | 452,808 | | | | Intangible assets, net | | | 60,717 | | | | 487,867 | | | | Goodwill | | | 10,857,600 | | | | 10,857,600 | | | | Other assets | | | 11,100 | | | | 72,714 | | | | Total assets | | $ | 19,279,066 | | | $ | 15,558,603 | | | | | | | | | | | | | | | LIABILITIES AND STOCKHOLDERS EQUITY | | | | | | | | | | | Accounts payable | | $ | 228,371 | | | $ | 181,668 | | | | Accrued liabilities | | | 446,896 | | | | 340,979 | | | | Deferred revenue | | | 52,576 | | | | 72,788 | | | | Lease liabilities, current portion | | | 127,046 | | | | 364,688 | | | | Contingent consideration for acquisitions, current portion | | | 1,483,583 | | | | 1,467,475 | | | | Total current liabilities | | | 2,338,472 | | | | 2,427,598 | | | | | | | | | | | | | | | Long term liabilities | | | | | | | | | | | Contingent consideration for acquisitions, net of current portion | | | - | | | | 1,413,696 | | | | Lease liabilities, net of current portion | | | 4,704 | | | | 178,824 | | | | Total liabilities | | | 2,343,176 | | | | 4,020,118 | | | | 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; 21,055,506 and 18,158,217 issued and outstanding, respectively | | | 21,056 | | | | 18,158 | | | | Additional paid-in capital | | | 82,506,758 | | | | 74,559,600 | | | | Accumulated deficit | | | (65,591,924 | ) | | | (63,039,273 | ) | | | Total stockholders equity | | | 16,935,890 | | | | 11,538,485 | | | | Total liabilities and stockholders equity | | $ | 19,279,066 | | | $ | 15,558,603 | | | The accompanying notes are an integral part of these consolidated financial statements.* | F-3 | | **THE GLIMPSE GROUP, INC.** **CONSOLIDATED STATEMENTS OF OPERATIONS** | | | 2025 | | | 2024 | | | | | | For the Years Ended | | | | | | June 30, | | | | | | 2025 | | | 2024 | | | | Revenue | | | | | | | | | | | Software services | | $ | 9,996,491 | | | $ | 8,130,515 | | | | Software license/software as a service | | | 503,734 | | | | 673,684 | | | | Royalty income | | | 27,700 | | | | - | | | | Total Revenue | | | 10,527,925 | | | | 8,804,199 | | | | Cost of goods sold | | | 3,407,946 | | | | 2,941,460 | | | | Gross profit | | | 7,119,979 | | | | 5,862,739 | | | | Operating expenses: | | | | | | | | | | | Research and development expenses | | | 3,494,731 | | | | 5,455,612 | | | | General and administrative expenses | | | 3,636,266 | | | | 4,292,001 | | | | Sales and marketing expenses | | | 2,201,754 | | | | 2,819,668 | | | | Amortization of acquisition intangible assets | | | 427,150 | | | | 1,241,228 | | | | Goodwill impairment | | | - | | | | 379,038 | | | | Intangible asset impairment | | | - | | | | 2,563,331 | | | | Change in fair value of acquisition contingent consideration | | | 102,412 | | | | (4,272,080 | ) | | | Total operating expenses | | | 9,862,313 | | | | 12,478,798 | | | | Loss from operations before other income | | | (2,742,334 | ) | | | (6,616,059 | ) | | | | | | | | | | | | | | Other income | | | | | | | | | | | Interest income | | | 189,683 | | | | 221,764 | | | | Net loss | | $ | (2,552,651 | ) | | $ | (6,394,295 | ) | | | | | | | | | | | | | | Basic and diluted net loss per share | | $ | (0.13 | ) | | $ | (0.38 | ) | | | | | | | | | | | | | | Weighted-average common shares outstanding for basic and diluted net loss per share | | | 19,633,374 | | | | 16,681,234 | | | *The accompanying notes are an integral part of these consolidated financial statements.* | F-4 | | **THE GLIMPSE GROUP, INC.** **CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY** **FOR THE YEARS ENDED JUNE 30, 2025 and 2024** | | | | | | | | | | | | | | | | | | | | | 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 and stock option based compensation expense | | | 399,201 | | | | 399 | | | | 2,009,402 | | | | - | | | | 2,009,801 | | | | Common stock issued to vendors | | | 44,197 | | | | 44 | | | | 100,328 | | | | - | | | | 100,372 | | | | Stock option-based board of directors expense | | | 332,642 | | | | 333 | | | | 655,295 | | | | - | | | | 655,628 | | | | Common stock issued for exercise of options | | | 8,819 | | | | 9 | | | | (9 | ) | | | - | | | | - | | | | Common stock issued in Securities Purchase Agreement, net | | | 1,885,715 | | | | 1,886 | | | | 2,966,615 | | | | - | | | | 2,968,501 | | | | Common stock issued to satisfy contingent acquisition obligations | | | 785,714 | | | | 785 | | | | 973,861 | | | | - | | | | 974,646 | | | | Net loss | | | - | | | | - | | | | - | | | | (6,394,295 | ) | | | (6,394,295 | ) | | | Balance as of June 30, 2024 | | | 18,158,217 | | | $ | 18,158 | | | $ | 74,559,600 | | | $ | (63,039,273 | ) | | $ | 11,538,485 | | | | Balance | | | 18,158,217 | | | $ | 18,158 | | | $ | 74,559,600 | | | $ | (63,039,273 | ) | | $ | 11,538,485 | | | | Common stock and stock option based compensation expense | | | 37,000 | | | | 37 | | | | 754,717 | | | | - | | | | 754,754 | | | | Common stock issued to vendors | | | 2,500 | | | | 3 | | | | 4,598 | | | | - | | | | 4,601 | | | | Stock option-based board of directors expense | | | - | | | | - | | | | 229,389 | | | | - | | | | 229,389 | | | | Common stock issued for exercise of options | | | 7,789 | | | | 8 | | | | (8 | ) | | | - | | | | - | | | | Common stock issued in Securities Purchase Agreement, net | | | 1,990,000 | | | | 1,990 | | | | 6,783,562 | | | | - | | | | 6,785,552 | | | | Common stock issued for exercise of warrants | | | 860,000 | | | | 860 | | | | 174,900 | | | | - | | | | 175,760 | | | | Net loss | | | - | | | | - | | | | - | | | | (2,552,651 | ) | | | (2,552,651 | ) | | | Balance as of June 30, 2025 | | | 21,055,506 | | | $ | 21,056 | | | $ | 82,506,758 | | | $ | (65,591,924 | ) | | $ | 16,935,890 | | | | Balance | | | 21,055,506 | | | $ | 21,056 | | | $ | 82,506,758 | | | $ | (65,591,924 | ) | | $ | 16,935,890 | | | *The accompanying notes are an integral part of these consolidated financial statements.* | F-5 | | **THE GLIMPSE GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS** | | | 2025 | | | 2024 | | | | | | For the Year Ended June 30, | | | | | | 2025 | | | 2024 | | | | Cash flows from operating activities: | | | | | | | | | | | Net loss | | $ | (2,552,651 | ) | | $ | (6,394,295 | ) | | | Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | Amortization and depreciation | | | 508,135 | | | | 1,361,628 | | | | Common stock and stock option based compensation for employees and board of directors | | | 984,143 | | | | 2,175,072 | | | | Net gain on divestiture of subsidiaries | | | (1,392,434 | ) | | | (1,000,000 | ) | | | Reserve on notes received in connection with divestiture of subsidiaries | | | 1,500,000 | | | | 1,000,000 | | | | Gain on office lease termination | | | (34,660 | ) | | | - | | | | Accrued non cash performance bonus fair value adjustment | | | - | | | | (551,239 | ) | | | Acquisition contingent consideration fair value adjustment | | | 102,412 | | | | (4,272,080 | ) | | | Impairment of intangible assets | | | - | | | | 2,942,369 | | | | Issuance of common stock to vendors | | | 4,601 | | | | 100,372 | | | | Adjustment to operating lease right-of-use assets and liabilities | | | (46,062 | ) | | | (110,866 | ) | | | Changes in operating assets and liabilities: | | | | | | | | | | | Accounts receivable | | | (117,519 | ) | | | 730,738 | | | | Deferred costs | | | 121,810 | | | | (12,229 | ) | | | Prepaid expenses and other current assets | | | 488,371 | | | | (216,018 | ) | | | Other assets | | | 5,349 | | | | (948 | ) | | | Accounts payable | | | 46,703 | | | | (274,109 | ) | | | Accrued liabilities | | | 109,062 | | | | (294,637 | ) | | | Deferred revenue | | | (1,034 | ) | | | (393,605 | ) | | | Net cash used in operating activities | | | (273,774 | ) | | | (5,209,847 | ) | | | Cash flow from investing activities: | | | | | | | | | | | Purchase of leasehold improvements and equipment | | | (42,508 | ) | | | (31,548 | ) | | | Payment of contingent consideration for acquisition | | | (1,500,000 | ) | | | (1,497,894 | ) | | | Cash used in investing activities | | | (1,542,508 | ) | | | (1,529,442 | ) | | | Cash flows provided by financing activities: | | | | | | | | | | | Proceeds from securities purchase agreement, net | | | 6,785,552 | | | | 2,968,501 | | | | Proceeds from exercise of warrants | | | 175,760 | | | | - | | | | Issuance of notes receivable | | | (189,000 | ) | | | - | | | | Notes receivable repayments | | | 28,400 | | | | - | | | | Net cash provided by financing activities | | | 6,800,712 | | | | 2,968,501 | | | | | | | | | | | | | | | Net change in cash and cash equivalents | | | 4,984,430 | | | | (3,770,788 | ) | | | Cash and cash equivalents, beginning of year | | | 1,848,295 | | | | 5,619,083 | | | | Cash and cash equivalents, end of year | | $ | 6,832,725 | | | $ | 1,848,295 | | | | | | | | | | | | | | | Non-cash Investing and Financing activities: | | | | | | | | | | | | | | | | | | | | | | Issuance of common stock for satisfaction of contingent liability | | $ | - | | | $ | 974,646 | | | | Issuance of common stock for non cash performance bonus | | $ | - | | | $ | 490,357 | | | | Lease liabilities arising from right-of-use assets | | $ | 20,344 | | | $ | - | | | *The accompanying notes are an integral part of these consolidated financial statements.* | F-6 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **NOTE 1. DESCRIPTION OF BUSINESS** The Glimpse Group, Inc. (Glimpse, the Company) is an Immersive technology company, providing Virtual Reality (VR), Augmented Reality(AR) and Spatial Computing software and services. Glimpses operating entities are located in the United States. The Company was incorporated in the State of Nevada in June 2016. Glimpses unique business model builds scale and a robust ecosystem, while simultaneously providing investors an opportunity to invest directly into this emerging industry via a diversified platform. The Company completed an initial public offering (IPO) of its common stock on the Nasdaq Capital Market Exchange on July 1, 2021, under the ticker VRAR. **NOTE 2. LIQUIDITY AND CAPITAL RESOURCES** In December 2024 and January 2025, the Company completed a Securities Purchase Agreement (SPA) with an institutional investor selling 2.75 million shares of common stock that resulted in total net cash proceeds to the Company of $6.79 million. See Note 10. Cash and cash equivalents as of June 30, 2025 was approximately $6.83 million, working capital as of June 30, 2025 was approximately $5.83 million and net cash used in operating activities for the year ended June 30, 2025 was approximately $0.27 million. The Company believes that it is sufficiently funded to meet its operational plan and future obligations beyond the 12-month period from the date that these financial statements were issued. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. **** **NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** ** *Basis of presentation* The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). **Principles of Consolidation** **** The accompanying consolidated financial statements include the balances of Glimpse and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. **Use of Accounting Estimates** **** The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the accompanying consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The principal estimates relate to the valuation of allowance for doubtful accounts, stock options, revenue recognition, allocation of the purchase price of assets relating to business combinations, calculation of contingent consideration for acquisitions, fair value of intangible assets and goodwill impairment. **** | F-7 | | **** THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **Cash and Cash Equivalents** Cash and equivalents represent cash and short-term, highly liquid investments, that are both readily convertible to known amounts of cash and so near their maturity they present insignificant risk of changes in value because of changes in interest rates, with maturities three months or less at the date of purchase. **Accounts Receivable** Accounts receivable consists of amounts due from customers under normal trade terms. We recognize accounts receivable at the amount we expect to collect from our customers. We provide an allowance for credit losses to reflect the estimated amount of accounts receivable that may not be collectible. We determine the allowance for credit losses through a combination of specific identification of troubled accounts, historical loss experience, industry trends, current market conditions, and customer creditworthiness. The allowance for credit losses is adjusted periodically to reflect changes in these factors. As of June 30, 2025 and 2024 no allowance for doubtful accounts was recorded as all amounts were considered collectible. **** **Customer Concentration and Credit Risk** Two customers accounted for approximately 61% (40%, and 21%, respectively) of the Companys total gross revenues during the year ended June 30, 2025. One of the same customers and another customer accounted for approximately 38% (23% and 15%, respectively) of the Companys total gross revenues during the year ended June 30, 2024. One customer accounted for approximately 46% of the Companys accounts receivable as of June 30, 2025. No other customer represented at least 10% of the Companys accounts receivable as of June 30, 2025. One of the same customers and one different customer accounted for approximately 38% (22% and 16%, respectively) of the Companys accounts receivable as of June 30, 2024. The Company maintains cash in accounts that, at times, may be in excess of the Federal Deposit Insurance Corporation limit. The Company has not experienced any losses on such accounts. **** **Business Combinations** **** The results of a business acquired in a business combination are included in the Companys consolidated financial statements from the date of the acquisition. Acquisition accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair values as of the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed may require management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenues, costs and cash flows. Estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is typically one year from the acquisition date, if new information is obtained about facts and circumstances that existed as of the acquisition date, changes in the estimated values of the net assets recorded may change the amount of the purchase price a located to goodwill. 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 (excluding Goodwill)** **** Intangible assets include acquired customer relationships and developed technology purchased. Intangible assets are stated at allocated cost less accumulated amortization and less impairments. Amortization is computed using the straight-line method over the estimated useful lives of the related assets. The Company reviews intangibles, being amortized, for impairment when current events indicate that the fair value may be less than the carrying value. | F-8 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **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. Goodwill is not amortized but instead is tested at least annually for impairment, or more frequently when events or changes in circumstances indicate that goodwill might be impaired. **Impairment of Long-Lived Assets** The Company reviews long-lived assets to be held and used, other than goodwill, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an evaluation of recoverability is required, the estimated undiscounted future cashflows directly associated with the asset are compared with the assets 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. **** **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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy, which is based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value, is as follows: Level 1 quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company classifies its cash equivalents within Level 1 of the fair value hierarchy on the basis of valuations based on quoted prices for the specific securities in an active market. The Companys contingent consideration is categorized as Level 3 within the fair value hierarchy. Contingent consideration is recorded within contingent consideration, current, and contingent consideration, non-current, in the Companys balance sheets as of June 30, 2025 and 2024. Contingent consideration has been recorded at its fair values using unobservable inputs that include assumptions regarding financial forecasts and discount rates. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Companys management. The Companys other financial instruments consist primarily of accounts receivable, accounts payable and other liabilities, and are reported at approximate fair value due to the short-term nature of these instruments. | F-9 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **Equipment and Leasehold Improvements** Equipment, comprised of computer hardware, and leasehold improvements are stated at cost less accumulated depreciation and amortization. Equipment is depreciated using the straight-line method over the estimated useful life of the asset, which is primarily 3 years. Leasehold improvements are amortized over the remaining life of the respective lease. Depreciation and amortization expense for the years ended June 30, 2025 and 2024 was approximately $0.08 million and $0.12 million, respectively. **** **Lease Obligations** Our operating leases are primarily comprised of administrative office space. We determine if an arrangement is a lease at inception and most of our leases contain fixed components. Our lease agreements may contain variable costs and such variable lease costs are expensed as incurred on the statements of operations. For leases with a lease term greater than 12 months, Right-of-use (ROU) assets and lease liabilities are recognized on our balance sheets at the commencement date based on the present value of the remaining fixed lease payments and includes only payments that are fixed and determinable at the time of commencement. Our lease terms may include options to extend the lease When determining the probability of exercising such options, we consider contract-based and market-based factors. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Our incremental borrowing rate is based on our understanding of what our credit rating would be in a similar economic environment. Operating lease costs are recognized on a straight-line basis over the lease terms. **** **Revenue Recognition** Nature of Revenues The Company reports its revenues in three categories: | | | Software Services: VR, AR and Spatial Computing projects, solutions and consulting services. | | | | | Software License and Software-as-a-Service (SaaS): VR, AR or Spatial Computing software that is sold either as a license or as a SaaS subscription. | | | | | Royalty Income: royalty income earned pursuant to specific agreements. | | 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 is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer or service is performed and collection is reasonably assured. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A portion of the Companys 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. | F-10 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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 and deferred costs, respectively, in the accompanying balance sheets. Deferred assets include cash payroll costs and may include payments to consultants and vendors. For distinct performance obligations recognized over time, the Company records deferred costs (costs in excess of billings) when revenue is recognized prior to invoicing, or deferred revenue (billings in excess of costs) when revenue is recognized subsequent to invoicing. The Company recognizes royalty income pursuant to agreements with divested entities representing a percentage of said entities collected revenue. Significant Judgments The Companys 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. Disaggregation of Revenue The Company generated revenue for the years ended June 30, 2025 and 2024 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. The Company currently generates its revenues primarily from customers in the United States. Revenue for a significant portion of Software Services projects and solutions (projects whereby, the development of the project leads to an identifiable asset with an alternative use to the Company) is recognized at the point of time in which the customer obtains control of the project, customer accepts delivery and confirms completion of the project. On rare occasions, the Company generates Software Services revenues which are custom project solutions (projects whereby, the development of the custom project leads to an identifiable asset with no alternative use to the Company, and, in which, the Company also has an enforceable right to payment under the contract) and are therefore recognized based on the percentage of completion using an input model with a master budget. 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 Licenses is recognized at the point of time in which the Company delivers the software and customer accepts delivery. Software Licenses often include third party components that are a fully integrated part of the Software License stack and are therefore considered as one deliverable and performance obligation. 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. | F-11 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Timing of Revenue The timing of revenue recognition for the years ended June 30, 2025 and 2024 was as follows: SCHEDULE OF TIMING REVENUE RECOGNITION | | | 2025 | | | 2024 | | | | | | For the Years Ended | | | | | | June 30, | | | | | | 2025 | | | 2024 | | | | Products and services transferred at a point in time | | $ | 9,979,789 | | | $ | 7,371,004 | | | | Products and services transferred/recognized over time | | | 548,137 | | | | 1,433,195 | | | | Total Revenue | | $ | 10,527,925 | | | $ | 8,804,199 | | | Remaining Performance Obligations Timing of revenue recognition may differ from the timing of invoicing to customers. The Company generally records a unbilled receivable asset when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. For certain Software Services project contracts the Company invoices customers after the project has been delivered and accepted by the customer. Software Service project contracts typically consist of designing and programming software for the customer. In most cases, there is only one distinct performance obligation, and revenue is recognized upon completion, delivery and customer acceptance. Contracts may include multiple distinct projects that can each be implemented and operated independently of subsequent projects in the contract. In such cases, the Company accounts for these projects as separate distinct performance obligations and recognizes revenue upon the completion of each project or obligation, its delivery and customer acceptance. For contracts recognized over time, deferred revenue include billings invoiced for software projects for which the contracts performance obligations are not complete. In rare Software Services project contract situations, the Company invoices customers for a substantial portion of the project upon entering into the contract due to their custom nature and revenue is recognized based upon percentage of completion. Revenue recognized subsequent to invoicing is recorded as deferred revenue (billings in excess of cost) and revenue recognized prior to invoicing is recorded as a deferred cost (cost in excess of billings). For Software Services consulting or retainer contracts, the Company generally invoices customers monthly at the beginning of each month in advance for services to be performed in the following month. The sole performance obligation is satisfied when the services are performed. Software Services consulting or retainer contracts typically consist of ongoing support for a customers software or specified business practices. For Software License contracts, the Company generally invoices customers when the software has been delivered to and accepted by the customer, which is also when the performance obligation is satisfied. For SaaS contracts, the Company generally invoices customers in advance at the beginning of the service term. For multi-period Software License contracts, the Company generally invoices customers annually at the beginning of each annual coverage period. Software License contracts consist of providing clients with software designed by the Company. For Software License contracts, there are generally no ongoing support obligations unless specified in the contract (becoming a Software Service). Unfulfilled performance obligations represent amounts expected to be earned by the Company on executed contracts. As of June 30, 2025 and 2024, the Company had approximately $0.94 million and $5.95 million, respectively, in unfulfilled performance obligations. | F-12 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **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. The Company values the options using the Black-Scholes Merton (Black Scholes) method utilizing various inputs such as expected term, expected volatility and the risk-free rate. The expected term reflects the application of the simplified method, which is the weighted average of the contractual term of the grant and the vesting period for each tranche. Expected volatility is based upon historical volatility for a rolling previous years trading days of the Companys common stock. The risk-free rate is based on the implied yield of U.S. Treasury notes as of the grant date with a remaining term approximately equal to the expected life of the award. **** **Research and Development Costs** **** Research and development expenses are expensed as incurred, and include payroll, employee benefits and stock-based compensation expense. Research and development expenses also include third-party development and programming costs. Given the emerging industry and uncertain market environment the Company operates in, research and development costs are not capitalized. **Income Taxes** The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax effects attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company establishes a valuation allowance if it is more likely than not that the deferred tax assets will not be recovered based on an evaluation of objective verifiable evidence. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit. The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740, Income Taxes, or ASC 740, also clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position. The Companys policy for recording interest and penalties associated with audits is to record such expense as a component of income tax expense. There were no amounts accrued for penalties or interest for the years ended June 30, 2025 and 2024. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position. **Earnings Per Share** Basic earnings per share (EPS) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential shares of common stock outstanding during the period using the treasury stock method. Dilutive potential common shares include the issuance of potential shares of common stock for outstanding stock options and warrants. **Recently Adopted Accounting Pronouncements** **** In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Improvements to Reportable Segment Disclosures, which requires incremental disclosures about reportable segments but does not change the definition of a segment or the guidance for determining reportable segments. It is applicable to companies with a single reporting segment. See Note 4. **** **Recent Accounting Pronouncements Not Yet Adopted** **** 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. The amendments are effective for the Companys annual periods beginning July 1, 2025. The Company is currently evaluating the ASU to determine its impact on the Companys disclosures. | F-13 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **NOTE 4. SEGMENT AND RELATED INFORMATION** The Company has one reportable segment managed on a consolidated basis: Immersive technology software development and commercialization. The Company derives revenue primarily in the United States and manages all business activities on a consolidated basis. The services are deployed to customers in a similar manner. The Companys chief operating decision maker (CDOM) is the Chief Executive Officer who reviews financial information presented on a consolidated basis to allocate resources, evaluate performance and make overall operating decisions. The measure of segment profit or loss that is most consistent with the consolidated financial statements is net cash used in operating activities. The accounting policies of our single reportable segment are the same as those for the consolidated financial statements. The level of disaggregation and amounts of significant revenue and cash expenses that are regularly provided to the CDOM are the same as presented in the consolidated statement of cash flows. Likewise, the measure of segment assets is reported on the consolidated balance sheets as total assets. **NOTE 5. QREAL AND GLIMPSE TURKEY DIVESTITURE** As part of an announced strategic realignment around Spatial Core and divestiture of non-core assets, effective October 1, 2024, the Company divested the business of its wholly owned subsidiary company QReal, LLC (QReal) and its related operating entity GLIMPSE GROUP YAZILIM VE ARGE TCARET ANONM RKET (Glimpse Turkey) in a management buyout by the then General Manager of QReal. The Company did not experience a material change to its revenue for the year ended June 30, 2025 and does not expect material changes to its expected revenues for year ended June 30 2026. The Company retains the revenues from QReals largest customer in full, until such time that the Company has collected and retained $1.35 million net cash in the aggregate, after taking into account all related operating expenses and fees (the Milestone). After satisfaction of the Milestone, the Company will receive a monthly cash revenue share for a period of 18 months in relation to any revenues generated from this same customer. The assets, as defined in the divestiture agreement, of Qreal/Glimpse Turkey, were sold in return for a $1.56 million senior secured convertible note from the purchasing (New) entity and a 10% equity stake in New entity. Principal payback of the note is tied directly to revenue collected by New entity (separate from the Milestone). The note converts to New entity equity upon certain equity capital raising of New entity, as defined. The Company accounts for the investment in New entity at cost ($100) because the Company does not control or have significant influence over the investment. The Company recorded a non-cash gain on the divestiture of approximately $1.40 million which is included in general and administrative expenses on the statement of operations for the year months ended June 30, 2025. The Company has also fully reserved against the note as collectability is considered uncertain and recorded a loan loss reserve of $1.50 million in general and administrative expenses on the statement of operations for the year ended June 30, 2025. The note reserve fully offsets the gain on divestiture detailed above. Revenue from the divested business that is not being retained going forward was approximately $0.15 million and $0.67 million, respectively, for the years ended June 30, 2025 and 2024. | F-14 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Pursuant to the original acquisition of QReal by the Company in 2016, upon sale of the entity the original sellers are due 8% (economic interest) of the Milestone proceeds. As the achievement of the Milestone is uncertain, liability for these payments will be recorded as actual Milestone proceeds occur. The Company recorded an expense of approximately $0.04 million related to the economic interest in sales and marketing expense on the statement of operations for the year ended June 30, 2025. As of June 30, 2025, the Company has received $0.45 million of the Milestone. In connection with the QReal divestiture, the Company made two personal loans to the majority owner of New entity to assist in startup funding of New entity. These loans are personally guaranteed by said majority owner. The loans bear interest at a nominal rate, have monthly repayment requirements and are due in full by October 31, 2025 and April 30, 2026, respectively. The net outstanding balance on the loans is recorded on the June 30, 2025 balance sheet as notes receivable. **NOTE 6. IMPAIRMENT OF GOODWILL AND LONG-LIVED ASSETS** **** **PulpoAR, LLC (Pulpo)** In December 2023 the Company divested the operations of its wholly owned subsidiary Pulpo due to poor revenue performance and non-strategic alignment. Accordingly, the fair value of intangible assets, including goodwill, originally recorded at the time of the purchase, were determined to be to be zero. The net assets of $0.90 million (consisting of intangible assets - technology with net book value of $0.52 million and goodwill of $0.38 million) were written-off and were included in goodwill impairment and intangible asset impairment on the statement of operations for the year ended June 30, 2024. The assets, as defined in the divestiture agreement, of Pulpo, were sold to an independent entity in return for a 10% interest in said entity and a $1.0 million note. The Company recorded a non cash $1.0 million gain on divestiture, which is included in general and administrative expenses on the statement of operations for the year ended June 30, 2024. The Company has fully reserved against the Note as collectability is considered remote and recorded a loan loss reserve against the note in general and administrative expenses on the statement of operations for the year ended June 30, 2024. This fully offsets the gain on divestiture detailed above. **Brightline Interactive, LLC (BLI)** As part of the BLI acquisition in August 2022, $3.31 million of the fair value purchase price was a located to intangible assets customer relationships. This allocation was based on BLI customers as of the acquisition date. At that time, the majority of BLIs existing customer base had engaged BLI to produce marketing focused product and was concentrated in one significant customer. During the year ended June 30, 2024, BLI commenced on a strategic shift of businesses focus to provide immersive technology solutions software and services that are primarily driven by Spatial Computing, Cloud and Artificial Intelligence aimed towards a different customer base than those existing at the acquisition date. In addition, the one significant customer at acquisition date had been a marginal revenue generator over the second half of fiscal 2024 and was not anticipated to represent material revenue going forward. Accordingly, as of June 30, 2024, it was determined that the BLI intangible assets customer relationships was fully impaired. This resulted in an intangible asset impairment non-cash expense of approximately $2.04 million on the statement of operations for the year ended June 30, 2024, representing the unamortized portion of this intangible asset. **** | F-15 | | **** THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **NOTE 7. GOODWILL AND INTANGIBLE ASSETS** The composition of goodwill as of June 30, 2025 and 2024 is as follows: SCHEDULE OF COMPOSITION OF GOODWILL | | | As of June 30, 2025 | | | | | | XRT | | | BLI | | | Total | | | | Goodwill | | $ | 300,000 | | | $ | 10,557,600 | | | $ | 10,857,600 | | | | | | XRT | | | PulpoAR | | | BLI | | | Total | | | | | | As of and for the Year ended June 30, 2024 | | | | | | XRT | | | PulpoAR | | | BLI | | | Total | | | | Goodwill - beginning of year | | $ | 300,000 | | | $ | 379,038 | | | $ | 10,557,600 | | | $ | 11,236,638 | | | | Impairments | | | - | | | | (379,038 | ) | | | - | | | | (379,038 | ) | | | Goodwill - end of year | | $ | 300,000 | | | $ | - | | | $ | 10,557,600 | | | $ | 10,857,600 | | | The composition of Intangible assets, their respective amortization period, and accumulated amortization as of June 30, 2025 and 2024 are as follows: SCHEDULE OF INTANGIBLE ASSETS, AMORTIZATION PERIOD AND ACCUMULATED AMORTIZATION**** | | | XR Terra | | | BLI | | | Glimpse Learning | | | Total | | | | | | | | | As of June 30, 2025 | | | | | | Value ($) | | | Amortization Period (Years) | | | | | | XR Terra | | | BLI | | | Glimpse Learning | | | Total | | | | | | | Intangible Assets | | | | | | | | | | | | | | | | | | | | | | | Technology | | | 300,000 | | | | 880,000 | | | | 326,435 | | | | 1,506,435 | | | | 3 | | | | Less: Accumulated Amortization | | | (300,000 | ) | | | (855,542 | ) | | | (290,176 | ) | | | (1,445,718 | ) | | | | | | | Intangible Assets, net | | $ | - | | | $ | 24,458 | | | $ | 36,259 | | | $ | 60,717 | | | | | | | | | | XR Terra | | | Pulpo | | | BLI | | | Glimpse Learning | | | Total | | | | | | | | | As of and for the Year ended June 30, 2024 | | | | | | Value ($) | | | Amortization Period (Years) | | | | | | XR Terra | | | Pulpo | | | BLI | | | Glimpse Learning | | | Total | | | | | | | Intangible Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | Customer Relationships - beginning of year | | $ | - | | | $ | - | | | $ | 3,310,000 | | | $ | - | | | $ | 3,310,000 | | | | 5 | | | | Customer Relationships - impairment | | | - | | | | - | | | | (3,310,000 | ) | | | - | | | | (3,310,000 | ) | | | | | | | Customer Relationships - end of year | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | Technology - beginning of year | | | 300,000 | | | | 925,000 | | | | 880,000 | | | | 326,435 | | | | 2,431,435 | | | | 3 | | | | Technology impairment | | | - | | | | (925,000 | ) | | | - | | | | - | | | | (925,000 | ) | | | | | | | Technology - end of year | | | 300,000 | | | | - | | | | 880,000 | | | | 326,435 | | | | 1,506,435 | | | | | | | | Less: Accumulated Amortization | | | (274,995 | ) | | | - | | | | (562,214 | ) | | | (181,359 | ) | | | (1,018,568 | ) | | | | | | | Intangible Assets, net | | $ | 25,005 | | | $ | - | | | $ | 317,786 | | | $ | 145,076 | | | $ | 487,867 | | | | | | | Intangible asset amortization expense for the years ended June 30, 2025 and 2024 was approximately $0.43 million and $1.24 million, respectively. Estimated intangible asset amortization expense as of June 30, 2025 for the remaining lives are as follows: SCHEDULE OF INTANGIBLE ASSET AMORTIZATION EXPENSE | Years Ended June 30, | | | | | | 2026 | | $ | 60,717 | | | | F-16 | | **** THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **NOTE 8. FINANCIAL INSTRUMENTS** **Cash and Cash Equivalents** The Companys money market funds are categorized as Level 1 within the fair value hierarchy. As of June 30, 2025 and 2024, the Companys cash and cash equivalents were as follows: SCHEDULE OF CASH AND CASH EQUIVALENTS AND INVESTMENTS | | | As of June 30, 2025 | | | | | | Cost | | | Unrealized Gain (Loss) | | | Fair Value | | | Cash and Cash Equivalents | | | | Cash | | $ | 130,288 | | | $ | - | | | | - | | | $ | 130,288 | | | | Level 1: | | | | | | | | | | | | | | | | | | | Money market funds | | | 6,702,437 | | | | - | | | $ | 6,702,437 | | | | 6,702,437 | | | | Total cash and cash equivalents | | $ | 6,832,725 | | | $ | - | | | $ | 6,702,437 | | | $ | 6,832,725 | | | | | | As of June 30, 2024 | | | | | | Cost | | | Unrealized Gain (Loss) | | | Fair Value | | | Cash and Cash Equivalents | | | | Cash | | $ | 109,659 | | | $ | - | | | | - | | | $ | 109,659 | | | | Level 1: | | | | | | | | | | | | | | | | | | | Money market funds | | | 1,738,636 | | | | - | | | $ | 1,738,636 | | | | 1,738,636 | | | | Total cash and cash equivalents | | $ | 1,848,295 | | | $ | - | | | $ | 1,738,636 | | | $ | 1,848,295 | | | **Contingent Consideration** As of June 30, 2025 and 2024, the Companys contingent consideration liabilities related to acquisitions are categorized as Level 3 within the fair value hierarchy. Contingent consideration was valued at June, 2025 and 2024 using unobservable inputs, primarily internal revenue forecasts. Contingent consideration was valued at the time of acquisitions using unobservable inputs and included using the Monte Carlo simulation model. This model incorporated revenue volatility, internal rate of return, and a risk-free rate. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Companys management with the assistance, at times, of a third-party valuation specialist. As of June 30, 2025, the Companys contingent consideration liabilities, current and non-current balances were as follows: SCHEDULE OF FAIR VALUE OF CONTINGENT CONSIDERATION | | | Contingent Consideration at Purchase Date | | | Consideration Paid | | | Changes in Fair Value | | | Fair Value | | | Contingent Consideration | | | | | | As of June 30, 2025 | | | | | | Contingent Consideration at Purchase Date | | | Consideration Paid | | | Changes in Fair Value | | | Fair Value | | | Contingent Consideration | | | | Level 3: | | | | | | | | | | | | | | | | | | | | | | | Contingent consideration, current - BLI | | | 1,264,200 | | | | (1,264,200 | ) | | | 1,483,583 | | | | 1,483,583 | | | | 1,483,583 | | | | Contingent consideration, current - XRT | | | - | | | | (499,288 | ) | | | 499,288 | | | | - | | | | - | | | | Total contingent consideration, current portion | | $ | 1,264,200 | | | $ | (1,264,200 | ) | | $ | 1,483,583 | | | $ | 1,483,583 | | | $ | 1,483,583 | | | | | | | | | | | | | | | | | | | | | | | | | | | Level 3: | | | | | | | | | | | | | | | | | | | | | | | Contingent consideration, non-current - BLI | | | 6,060,700 | | | | (1,733,694 | ) | | | (4,327,006 | ) | | | - | | | | - | | | | Total contingent consideration, net of current portion | | $ | 6,060,700 | | | $ | (1,733,694 | ) | | $ | (4,327,006 | ) | | $ | - | | | $ | - | | | | F-17 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Actual BLI revenue through June 30, 2025 resulted in additional gross consideration of $1.5 million over the remainder of the contingent consideration payout period ending on July 31, 2025, payable in cash. Actual BLI revenue through July 31, 2025 did not trigger additional consideration. Accordingly, contingent consideration remaining for the BLI acquisition as of June 30, 2025 is calculated at the present value of the remaining $1.5 million cash discounted at risk-free interest rates from the estimated payment date. The change in fair value of contingent consideration for BLI for the year ended June 30, 2025 was a non-cash expense of approximately $0.14 million included as change in fair value of acquisition contingent consideration in the statements of operations. This reflects the change in the time value of money related to the present value of anticipated payments. The change in fair value of contingent consideration for XR Terra, LLC (XRT) for the year ended June 30, 2025 was a non-cash gain of approximately $0.03 million included as change in fair value of acquisition contingent consideration in the statements of operations. This reflects the reversal of the estimated final consideration payment related to the acquisition of XRT. The contingent consideration payout period ended September 2024. As of June 30, 2024, the Companys contingent consideration liabilities current and non-current balances were as follows: | | | Contingent Consideration at Purchase Date | | | Consideration Paid | | | Changes in Fair Value | | | Fair Value | | | Contingent Consideration | | | | | | As of June 30, 2024 | | | | | | Contingent Consideration at Purchase Date | | | Consideration Paid | | | Changes in Fair Value | | | Fair Value | | | Contingent Consideration | | | | Level 3: | | | | | | | | | | | | | | | | | | | | | | | Contingent consideration, current - BLI | | $ | 1,264,200 | | | $ | - | | | $ | 167,561 | | | $ | 1,431,761 | | | $ | 1,431,761 | | | | Contingent consideration, current - S5D | | | 2,060,300 | | | | (1,359,001 | ) | | | (701,299 | ) | | | - | | | | - | | | | Contingent consideration, current - XRT | | | - | | | | (499,288 | ) | | | 535,002 | | | | 35,714 | | | | 35,714 | | | | Total contingent consideration, current portion | | $ | 3,324,500 | | | $ | (1,858,289 | ) | | $ | 1,264 | | | $ | 1,467,475 | | | $ | 1,467,475 | | | | | | | | | | | | | | | | | | | | | | | | | | | Level 3: | | | | | | | | | | | | | | | | | | | | | | | Contingent consideration, non-current - BLI | | $ | 6,060,700 | | | $ | (1,497,894 | ) | | $ | (3,149,110 | ) | | $ | 1,413,696 | | | $ | 1,413,696 | | | | Contingent consideration, non-current - S5D | | | 7,108,900 | | | | (2,857,143 | ) | | | (4,251,757 | ) | | | - | | | | - | | | | Total contingent consideration, net of current portion | | $ | 13,169,600 | | | $ | (4,355,037 | ) | | $ | (7,400,867 | ) | | $ | 1,413,696 | | | $ | 1,413,696 | | | Revenue projections for BLI were expected to trigger potential additional gross consideration of $3.0 million over the remainder of the contingent consideration payout period ending in July 31, 2025, payable in cash (of which $1.5 million was paid in February 2025). The possibility of achieving any remaining revenue targets to trigger additional consideration was remote. Accordingly, contingent consideration remaining for the BLI acquisition as of June 30, 2024 is calculated at the present value of the estimated remaining $3.0 million cash discounted at risk-free interest rates from the estimated payment dates. Sector 5 Digital, LLC (S5D) had significantly underperformed revenue expectations that were employed to determine fair value at acquisition. The possibility of achieving any remaining revenue targets to trigger additional consideration was remote and all earned consideration had been paid. Accordingly, there was no future contingent consideration recorded related to the S5D acquisition as of June 30, 2024. The contingent consideration payout period ended January 2025 with no additional consideration paid. The contingent consideration related to XRT as of June 30, 2024 represented an accrual for anticipated achievement of an additional revenue threshold though the end of the contingent consideration period September 2024. | F-18 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The change in fair value of contingent consideration for BLI and S5D for the year ended June 30, 2024 was a non-cash gain of approximately $1.87 million and $2.35 million, respectively, included as change in fair value of acquisition contingent consideration in the statement of operations. This was primarily driven by the decrease in the Companys common stock price between the measurement dates and reduced revenue projections. In addition, a payment was made to the sellers of S5D for consideration in March 2024 in the form of Company common stock, fair valued at $0.81 million; and a $1.49 million cash payment was made to the sellers of BLI for consideration in May 2024. The change in fair value of contingent consideration for XRT for the year ended June 30, 2024 was a non-cash gain of approximately $0.05 million, included as change in fair value of acquisition contingent consideration in the statement of operations. This reflects the decrease in the Companys common stock price between the measurement dates partially offset by an accrual for final consideration payment. In addition, payments were made to the sellers of XRT for consideration in September 2023 and January 2024 in the form of Company common stock, fair valued at $0.17 million. **NOTE 9. DEFERRED COSTS AND DEFERRED REVENUE** As of June 30, 2025 and 2024, deferred costs totaling $48,971 and $170,781, respectively, consists of costs deferred under contracts not completed and recognized at a point in time ($48,971 and $135,057, respectively), and costs in excess of billings under contracts not completed and recognized over time ($0 and $35,724, respectively). As of June 30, 2025 and 2024, deferred revenue, totaling $52,576 and $72,788, respectively, consists of revenue deferred under contracts not completed and recognized at a point in time. The following table shows the net activity of deferred cost and deferred revenue for the years ended June 30, 2025 and 2024: SCHEDULE OF RECONCILIATION OF COST IN EXCESS OF BILLING FOR CONTRACT RECOGNIZED OVER TIME | | | 2025 | | | 2024 | | | | | | As of and for the Years ended June 30, | | | | | | 2025 | | | 2024 | | | | | | | | | | | | | Deferred costs - beginning of year | | $ | 170,781 | | | $ | 158,552 | | | | Deferred cost recognized as cost of goods sold during year | | $ | (170,781 | ) | | | (158,552 | ) | | | Costs incurred and not yet recognized as cost of goods sold | | $ | 48,971 | | | | 170,781 | | | | Deferred cost - end of year | | $ | 48,971 | | | $ | 170,781 | | | | | | | | | | | | | | | Deferred revenue - beginning of year | | $ | 72,788 | | | $ | 466,393 | | | | Deferred revenue recognized as revenue during year | | $ | (72,788 | ) | | | (466,393 | ) | | | Payments received and not yet recognized as revenue | | $ | 52,576 | | | | 72,788 | | | | Deferred revenue - end of year | | $ | 52,576 | | | $ | 72,788 | | | | F-19 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **NOTE 10. EQUITY** **Securities Purchase Agreements (SPA)** **SPA 2024** In December 2024, the Company completed a SPA with an institutional investor selling 1,990,000 shares of common stock at $2.65 per share and pre-funded warrants to purchase up to 760,000 shares of common stock at $2.649 per warrant (which is convertible to one share of common stock on a one for one basis). The pre-funded warrants were exercised in full in January 2025 at the exercise price of $0.001 per share of common stock. The Company realized total net proceeds (after underwriting and professional fees) of $6.79 million from the SPA 2024. **SPA 2023** In October 2023, the Company completed a SPA with certain institutional investors selling 1,885,715 shares of common stock for approximately $3.30 million (at $1.75 per share). The Company realized net proceeds (after underwriting, professional fees and listing expenses) of $2.97 million. 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. **Common Stock Issued** *Exercise of Warrants* In December 2024, an institutional investor exercised warrants (issued in connection with a November 2021 SPA) convertible into 100,000 shares of common stock. The Company realized proceeds of $0.18 million ($1.75 per share). In January 2025, an institutional investor exercised warrants (issued in connection with a December 2024 SPA) convertible into 760,000 shares of common stock. The Company realized de minimis proceeds (760,000 shares at $0.001 per share). *Common stock issued to Employees as Compensation* During the year ended June 30, 2025, the Company issued 37,000 unrestricted shares of common stock to an employee as compensation and recorded share-based compensation of approximately $0.05 million in sales and marketing expenses in the statement of operations. During the year ended June 30, 2024, the Company issued approximately 399,000 unrestricted shares of common stock to various employees as compensation (including contractual bonus payments upon achievement of defined revenue milestones) and recorded share-based compensation of approximately $0.58 million in general and administrative and sales and marketing expenses in the statement of operations. *Common stock issued to Vendors* During the year ended June 30, 2025, the Company issued 2,500 unrestricted shares of common stock to a vendor for services performed and recorded share-based expense of approximately $0.01 million in sales and marketing expenses in the statement of operations. During the year ended June 30, 2024, the Company issued approximately 44,000 unrestricted shares of common stock to various vendors for services performed and recorded share-based expense of approximately $0.10 million, primarily in sales and marketing expenses in the statement of operations. *Common stock issued for Exercise of Stock Options* ** During the year ended June 30, 2025, the Company issued approximately 8,000 shares of common stock in cashless transactions upon exercise of the respective option grants and realized cash proceeds of zero. During the year ended June 30, 2024, the Company issued approximately 9,000 shares of common stock in cashless transactions upon exercise of the respective option grants and realized cash proceeds of zero. | F-20 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS *Common stock issued to satisfy Contingent Acquisition Obligations* ** During the year ended June 30, 2024, the Company issued approximately 714,000 shares of common stock, with a fair value of approximately $0.81 million, to satisfy a contingent acquisition obligation for the achievement of a certain revenue performance milestone related to the acquisition of S5D. In addition, the Company issued approximately 71,000 shares of common stock, with a fair value of approximately $0.17 million, to satisfy a contingent acquisition obligation for the achievement of revenue performance milestones by XRT. *Common stock issued to Board of Directors* During the year ended June 30, 2024, the Company issued approximately 258,000 shares of common stock to certain board members in return for canceling 443,000 fully vested stock options, and recorded share-based board compensation of approximately $0.37 million. In addition, the Company issued 75,000 shares of common stock to certain board members as calendar year 2024 compensation and recorded share-based board compensation of approximately $0.11 million. The expense for these issuances was recorded in general and administrative expenses in the statement of operations. **Warrants** **** In connection with the July 2021 IPO, the November 2021 SPA and the December 2024 SPA, the Company issued warrants, which are exercisable into Company common shares on a one-for-one basis, as detailed below. The warrants are not publicly traded. Warrants exercised since issuance are 100,000 warrants from the November 2021 SPA exercised in December 2024 and 760,000 warrants from the December 2024 SPA exercised in January 2025. The remaining outstanding warrants as of June 30, 2025 are: SCHEDULE OF WARRANTS OUTSTANDING | | | Warrants Outstanding | | | Exercise Price | | | Expiration Date | | | | | | | | | | | | | | July 2021 IPO | | | 87,500 | | | $ | 7.00 | | | June 2026 | | | November 2021 SPA | | | 481,000 | | | $ | 1.75 | | | November 2026 | | | November 2021 SPA | | | 169,000 | | | $ | 1.75 | | | May 2027 | | | Total | | | 737,500 | | | | | | | | | **Employee Stock-Based Compensation** *Stock Option issuance to Executives* In February 2023, pursuant to the Equity Incentive Plan, the Company granted certain executive officers 2.20 million stock options as a long-term incentive. The options have an exercise price of $7.00 per share. 0.22 million of these options vest ratably over four years (Initial Options). The remainder (Target Options) vest in fixed amounts based on achieving various revenue or common stock prices within seven years of grant date. Given the Companys current stock price and revenue, the Company views the achievement of the milestones that would trigger vesting of the Target Options as remote. | F-21 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS *Equity Incentive Plan* The Companys 2016 Equity Incentive Plan (the Plan), as amended, has approximately 13.17 million common shares reserved for issuance. As of June 30, 2025, there were approximately 7.40 million shares available for issuance under the Plan. The shares available are after the granting of 1.98 million shares of executive Target Options. The Company recognizes compensation expense relating to awards ratably over the requisite period, which is generally the vesting period. Stock options have been recorded at their fair value. The Black-Scholes option-pricing model assumptions used to value the issuance of stock options under the Plan for the specific periods below are noted in the following table: SCHEDULE OF STOCK OPTION FAIR VALUE ASSUMPTION | | | 2025 | | | 2024 | | | | | | For the Years Ended June 30, | | | | | | 2025 | | | 2024 | | | | Weighted average expected terms (in years) | | | 5.5 | | | | 5.1 | | | | Weighted average expected volatility | | | 125.6 | % | | | 103.3 | % | | | Weighted average risk-free interest rate | | | 4.3 | % | | | 4.3 | % | | | Expected dividend yield | | | 0.0 | % | | | 0.0 | % | | In February 2024, the Company offered current domestic employees the ability to cancel vested and non-vested stock options in return for a lesser amount of newly granted stock options at lower exercise prices and a new three-year vesting schedule. Pursuant to this offer, the Company cancelled approximately 828,000 employee options in February 2024 and granted approximately 578,000 new options to employees in March 2024. In addition, this offer was completed for a board member and approximately 31,000 vested options were cancelled and approximately 21,000 new options were granted. Also, in February 2024, 250,000 fully vested options granted to an executive were cancelled and 250,000 new options were granted in March 2024 at a lower exercise price and a new vesting schedule of approximately four years. The grant date fair value for options granted during the years ended June 30, 2025 and 2024 was approximately $0.75 million and $1.53 million (including the new grants detailed above), respectively. The following is a summary of the Companys stock option activity for the years ended June 30, 2025 and 2024, excluding the executive Target Options: SUMMARY OF STOCK OPTION ACTIVITY | | | | | | Weighted Average | | | | | | | | | | | | | | | Remaining | | | | | | | | | | | | Exercise | | | Contractual | | | Intrinsic | | | | | | Options | | | Price | | | Term (Yrs) | | | Value | | | | Outstanding at July 1, 2024 | | | 3,643,880 | | | $ | 3.95 | | | | 6.5 | | | $ | - | | | | Options Granted | | | 545,801 | | | | 2.38 | | | | 9.4 | | | | 16,300 | | | | Options Exercised | | | (35,600 | ) | | | 2.50 | | | | 1.8 | | | | - | | | | Options Forfeited / Cancelled | | | (1,387,875 | ) | | | 4.53 | | | | 6.8 | | | | 9,942 | | | | Outstanding at June 30, 2025 | | | 2,766,206 | | | $ | 3.37 | | | | 5.6 | | | $ | - | | | | Exercisable at June 30, 2025 | | | 1,850,129 | | | $ | 3.58 | | | | 4.6 | | | $ | - | | | The above table excludes executive Target Options: 1,980,000 granted, $7.00 exercise price, 7.6 remaining term in years, no intrinsic value. Vesting of these is considered remote. | F-22 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | | | | | | Weighted Average | | | | | | | | | | | | | | | Remaining | | | | | | | | | | | | Exercise | | | Contractual | | | Intrinsic | | | | | | Options | | | Price | | | Term (Yrs) | | | Value | | | | Outstanding at July 1, 2023 | | | 6,128,381 | | | $ | 4.84 | | | | 7.0 | | | $ | 1,676,966 | | | | Options Granted | | | 1,380,662 | | | | 2.35 | | | | 8.3 | | | | 98,542 | | | | Options Exercised | | | (25,000 | ) | | | 2.00 | | | | 2.4 | | | | - | | | | Options Forfeited / Cancelled | | | (3,840,163 | ) | | | 4.81 | | | | 6.5 | | | | - | | | | Outstanding at June 30, 2024 | | | 3,643,880 | | | $ | 3.95 | | | | 6.5 | | | $ | - | | | | Exercisable at June 30, 2024 | | | 1,973,499 | | | $ | 4.06 | | | | 5.0 | | | $ | - | | | The above table excludes executive Target Options: 2,100,000 granted (includes 120,000 attributable to an executive who resigned in July 2024), $7.00 exercise price, 8.6 remaining term in years, no intrinsic value. Vesting of these is considered remote. The intrinsic value of stock options activity for the years ended June 30, 2025 and 2024 was computed using a fair market value (fiscal year to date VWAP volume weighted average price) of the common stock of $2.31 per share and $1.89 per share, respectively. The Companys stock option-based expense for the years ended June 30, 2025 and 2024 consisted of the following: SCHEDULE OF STOCK OPTION BASED EXPENSE | | | 2025 | | | 2024 | | | | | | For the Years Ended | | | | | | June 30 | | | | | | 2025 | | | 2024 | | | | Stock option-based expense : | | | | | | | | | | | Research and development expenses | | $ | 210,498 | | | $ | 731,638 | | | | General and administrative expenses | | | 394,039 | | | | 346,309 | | | | Sales and marketing expenses | | | 97,520 | | | | 349,377 | | | | Board option expense | | | 229,389 | | | | 179,950 | | | | Total | | $ | 931,446 | | | $ | 1,607,274 | | | There is no expense included for the executive officers Target Options. As of June 30, 2025 total unrecognized compensation expense to employees, board members and vendors related to stock options was approximately $1.15 million (excluding executive Target Options vested value of $8.08 million, which vesting is considered remote) and is expected to be recognized over a weighted average period of 1.56 years (which excludes the executive Target Options). **** **NOTE 11. EARNINGS PER SHARE** The following table presents the computation of basic and diluted net loss per common share: SCHEDULE OF COMPUTATION OF BASIC AND DILUTED NET LOSS PER SHARE | Numerator: | | 2025 | | | 2024 | | | | | | For the Years Ended | | | | | | June 30, | | | | Numerator: | | 2025 | | | 2024 | | | | Net loss | | $ | (2,552,651 | ) | | $ | (6,394,295 | ) | | | Denominator: | | | | | | | | | | | Weighted-average common shares outstanding for basic and diluted net loss per share | | | 19,633,374 | | | | 16,681,234 | | | | | | | | | | | | | | | Basic and diluted net loss per share | | $ | (0.13 | ) | | $ | (0.38 | ) | | | F-23 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Potentially dilutive securities, on a weighted average basis, that were not included in the calculation of diluted net loss per share attributable to common stockholders because their effect would be anti-dilutive are as follows (in common equivalent shares): SCHEDULE OF ANTI_DILUTIVE POTENTIALLY DILUTIVE SECURITIES | | | 2025 | | | 2024 | | | | | | For the Years Ended | | | | | | June 30 | | | | | | 2025 | | | 2024 | | | | Options | | | 5,050,533 | | | | 6,583,972 | | | | Warrants | | | 813,500 | | | | 837,500 | | | | Total | | | 5,864,033 | | | | 7,421,472 | | | Stock options above include 1,980,000 and 2,100,000 executive Target Options as of June 30, 2025 and 2024, respectively. Vesting of these is considered remote. **NOTE 12. PROVISION FOR INCOME TAXES** The components of loss before provision for income taxes for the years ended June 30, 2025 and 2024 were as follows: SCHEDULE OF LOSS BEFORE PROVISION FOR INCOME TAXES | | | 2025 | | | 2024 | | | | | | For the Years ended June 30, | | | | | | 2025 | | | 2024 | | | | | | | | | | | | | Loss subject to domestic income taxes | | $ | (2,197,907 | ) | | $ | (4,195,185 | ) | | | Loss subject to foreign income taxes | | | (354,744 | ) | | | (2,199,110 | ) | | | Total loss | | $ | (2,552,651 | ) | | $ | (6,394,295 | ) | | The Company recorded provision for foreign income taxes for the years ended June 30, 2025 and 2024 consists of the following: SCHEDULE OF PROVISION FOR FOREIGN INCOME TAXES | | | 2025 | | | 2024 | | | | | | For the Years ended June 30, | | | | | | 2025 | | | 2024 | | | | | | | | | | | | | Current | | $ | - | | | $ | 38,588 | | | | Deferred | | | - | | | | (38,588 | ) | | | Total provision for income taxes | | $ | - | | | $ | - | | | There was no current or deferred income tax provision for the years ended June 30, 2025 and 2024. | F-24 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The reconciliation of taxes at the U.S. federal statutory rate to our provision for income taxes for the years ended June 30, 2025 and 2024 were as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION STATUTORY RATE | | | For the Years Ended June 30, | | | | | | 2025 | | | 2024 | | | | | | | | | | | | | Statutory Federal Income Tax Rate | | | -21.00 | % | | | -21.00 | % | | | State and Local Taxes, Net of Federal Tax Benefit | | | -2.34 | % | | | -10.15 | % | | | Stock Based Compensation Expense (ISO) | | | 5.52 | % | | | 3.46 | % | | | Foreign tax rate differential | | | -4.00 | % | | | -4.00 | % | | | GAAP to Statutory rate | | | 3.47 | % | | | 13.76 | % | | | Change in Valuation Allowance | | | 18.35 | % | | | 17.93 | % | | | Income Taxes Provision | | | 0.00 | % | | | 0.00 | % | | The Company had deferred tax assets as of June 30, 2025 and 2024 as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS | | | As of June 30, | | | As of June 30, | | | | | | 2025 | | | 2024 | | | | | | | | | | | | | Net operating loss carryforward | | $ | 8,189,759 | | | $ | 9,347,624 | | | | Goodwill and intangible asset | | | 3,467,304 | | | | 2,949,790 | | | | Stock-based compensation | | | 369,595 | | | | 306,274 | | | | Other | | | 583,433 | | | | 1,610,589 | | | | Total Deferred Tax Assets | | | 12,610,091 | | | | 14,214,277 | | | | Valuation allowance | | | (12,610,091 | ) | | | (14,175,689 | ) | | | Deferred Tax Asset, Net | | $ | - | | | $ | 38,588 | | | The Company has established a valuation allowance against the net U.S. deferred tax assets due to uncertainty regarding the ability to utilize these deferred tax assets in the future. As of June 30, 2025, the Company had Federal net operating loss carryforwards (NOLs) for the years ending June 30, 2018 and prior of approximately $2.88 million that begin to expire in 2037 and NOLs for the years ending June 30, 2019 through 2025 of approximately $34.99 million that have no expiration date. New York State / New York City NOLs as of June 30, 2025 of approximately $13.39 million and $13.37 million, respectively, have no expiration date. California and Virginia State NOLs as of June 30, 2025 of $12.0 million and $1.72 million, respectively, have no expiration date. Section 382 of the U.S. Internal Revenue Code imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership. The Company has not completed a Section 382 analysis of stock ownership and its effect upon federal and state NOL carryforwards. Consequently, the Companys NOL carryforwards may be subject to annual limitations under Section 382. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and taxing strategies in making this assessment. As a result of the uncertainty in the realization of the Companys deferred tax assets, the Company has provided a valuation allowance for the full amount of the deferred tax assets as of June 30, 2025 and 2024. Upon completion of its 2024 (for fiscal year ending June 30, 2025) U.S. income tax return, the Company may identify additional remeasurement adjustments. The Company will continue to assess its provision for income taxes as future guidance is issued, but does not currently anticipate significant revisions will be necessary. | F-25 | | THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS *Uncertain Tax Positions* The following table summarizes the activity related to unrecognized tax benefits for the years ended June 30, 2025 and 2024: SCHEDULE OF UNRECOGNIZED TAX BENEFITS | | | 2025 | | | 2024 | | | | | | For the Years ended June 30, | | | | | | 2025 | | | 2024 | | | | | | | | | | | | | Unrecognized tax benefit - beginning of year | | $ | 38,588 | | | $ | - | | | | Gross increases - prior year tax positions | | | - | | | | - | | | | Gross decreases - prior year tax positions | | | (38,588 | ) | | | - | | | | Gross increases - current year tax positions | | | - | | | | 38,588 | | | | Gross decreases - current year tax positions | | | - | | | | - | | | | Statute lapse | | | - | | | | - | | | | Total provision for income taxes | | $ | - | | | $ | 38,588 | | | The beginning balance of unrecognized tax benefits of $38,588 was reversed in the current year as the Company divested Glimpse Turkey. No interest and penalties were incurred or accrued for the years ended June 30, 2025 and 2024. The Company files U.S., state and foreign tax returns with varying statutes of limitations. No examinations by U.S., state or foreign authorities are currently under way. **NOTE 13. COMMITMENTS AND CONTINGENCIES** **** **Lease Costs** The Company made cash payments for all operating leases for the years ended June 30, 2025 and 2024, of approximately $0.41 million and $0.58 million, respectively, which were included in cash flows from operating activities within the consolidated statements of cash flows. As of June 30, 2025, the Companys operating leases have a weighted average remaining lease term of 0.60 years and weighted average discount rate of 8.20%. The total rent expense for all operating leases for the years ended June 30, 2025 and 2024, was approximately $0.33 million and $0.46 million, respectively. **** | F-26 | | **** THE GLIMPSE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS **Lease Commitments** The Company has various operating leases for its offices. These existing leases have remaining lease terms ranging from approximately 0.5 to 1.5 years. Certain lease agreements contain options to renew, with renewal terms that generally extend the lease terms by 1 to 3 years for each option. The Company determined that none of its current leases are expected to be renewed except one. That remaining lease will not be renewed under its current terms and will be renegotiated. Therefore, said lease does not have a measurable term or rate to calculate future lease payments beyond its current term. Future approximate undiscounted lease payments for the Companys operating lease liabilities and a reconciliation of these payments to its operating lease liabilities as of June 30, 2025 are as follows: SCHEDULE OF UNDISCOUNTED LEASE PAYMENTS | Years Ended June 30, | | | | | | 2026 | | | 183,882 | | | | 2027 | | | 4,775 | | | | Total future minimum lease commitments, including short-term leases | | | 188,658 | | | | Less: future minimum lease payments of short -term leases | | | (52,500 | ) | | | Less: imputed interest | | | (4,407 | ) | | | Present value of future minimum lease payments, excluding short term leases | | $ | 131,750 | | | | | | | | | | | Current portion of operating lease liabilities | | $ | 127,046 | | | | Non-current portion of operating lease liabilities | | | 4,704 | | | | Total operating lease liability | | $ | 131,750 | | | **Contingent Consideration for Acquisitions** Contingent consideration for acquisitions consists of the following as of June 30, 2025 and 2024, respectively (see Note 8): SCHEDULE OF CONTINGENT CONSIDERATION FOR ACQUISITIONS | | | As of June 30, | | | As of June 30, | | | | | | 2025 | | | 2024 | | | | BLI, current portion | | $ | 1,483,583 | | | $ | 1,431,761 | | | | XRT | | | - | | | | 35,714 | | | | Subtotal current portion | | | 1,483,583 | | | | 1,467,475 | | | | BLI, net of current portion | | | - | | | | 1,413,696 | | | | Contingent consideration for acquisitions, net of current portion | | | - | | | | 1,413,696 | | | | Total contingent consideration for acquisitions | | $ | 1,483,583 | | | $ | 2,881,171 | | | In addition, as a result of actual revenue not achieving targets, there is no future contingent consideration recorded related to the S5D acquisition as of June 30, 2024. The contingent consideration payout period ended in January 2025 with no further consideration payments being made. **NOTE 14. SUBSEQUENT EVENTS** In August 2025, the Company closed on an agreement to sell its Pose With the Pros business for an initial consideration of $0.25 million in cash and potential future revenue royalties. In connection therewith, the Company received a $0.05 million nonrefundable prepayment of the consideration in June 2025, which is recorded in accrued liabilities in the balance sheet as of June 30, 2025. This divestiture is not expected to have a material effect on the Companys revenue and expense. It is anticipated the Company will record a gain at the time of the sale of no more than the initial consideration. | F-27 | |