EQUITY

12 Months Ended

Jun. 30, 2024

Equity [Abstract]

EQUITY

NOTE 9. EQUITY

Securities Purchase Agreement (“SPA”)

On September 28, 2023, the Company entered into a SPA with certain institutional investors to sell 1,885,715 shares of common stock for approximately $3.30 million (at $1.75 per share). The Company realized net proceeds (after underwriting, professional fees and listing expenses) of $2.97 million on October 3, 2023.

The SPA shares were issued on October 3, 2023. 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

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.

During the year ended June 30, 2023 the Company issued approximately 577,000 shares of common stock, with a fair value of approximately $2.41 million, to partially satisfy a contingent acquisition obligation related to the purchase of S5D. In addition, the Company issued approximately 107,000 shares of common stock, with a fair value of approximately $0.32 million, to satisfy a contingent acquisition obligation of approximately $0.57 million less the repayment of a secured promissory note of $0.25 million (see Note 12), related to the acquisition of AUGGD. Furthermore, the Company issued approximately 71,000 shares of common stock, valued at $0.33 million, for the achievement of a revenue performance milestone by XR Terra.

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024 AND 2023

Common stock issued to Employees as Compensation

During the year ended June 30, 2024, the Company issued approximately 399,000 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 primarily in sales and marketing expenses on the consolidated statement of operations.

During the year ended June 30, 2023, the Company issued approximately 155,000 shares of common stock to various employees as compensation and recorded share-based compensation of approximately $0.64 million in general and administrative and sales and marketing expenses on the consolidated statement of operations.

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. All board compensation is reported in general and administrative expenses on the consolidated statement of operations

Common stock issued for Exercise of Stock Options

During the years ended June 30, 2024 and 2023, the Company issued approximately 9,000 and 42,000 shares of common stock in cash and cashless transactions, respectively, upon exercise of the respective option grants and realized cash proceeds of approximately $0.0 million and $0.07 million, respectively.

Common stock issued to Vendors

During the years ended June 30, 2024 and 2023, the Company issued approximately 44,000 and 2,000 shares of common stock, respectively, to various vendors for services performed and recorded share-based compensation of approximately $0.10 million and $0.01 million, respectively, primarily in sales and marketing expenses on the consolidated statement of operations.

Common stock issued for Business Acquisition and Asset Acquisition - Technology

During the year ended June 30, 2023, the Company issued approximately: 714,000 shares of common stock, valued at $2.85 million, as consideration for the acquisition of BLI; 71,000 shares of common stock valued at $0.33 million, per the assignment agreement with inciteVR; and 214,000 shares of common stock, valued at $0.73 million, as consideration for the acquisition of Pulpo.

Warrants

In connection with the July 2021 IPO and the November 2021 SPA, the Company issued warrants, which are exercisable into Company common shares on a one-for-one basis, as detailed below. No warrants have been exercised since issuance. The warrants are not publicly traded.

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024 AND 2023

	Warrants Outstanding		Exercise Price		Expiration Date
July 2021 IPO		87,500	$	7.00	June 2026
November 2021 SPA		555,000	$	1.75	November 2026
November 2021 SPA		195,000	$	1.75	May 2027
Total		837,500

Employee Stock-Based Compensation

Stock Option issuance to Executives

In February 2023, pursuant to the Equity Incentive Plan, the Company granted certain executive officers 2.32 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 Company’s current stock price and revenue, the Company views the achievement of the milestones that would trigger vesting of the Target Options as remote.

Equity Incentive Plan

The Company’s 2016 Equity Incentive Plan (the “Plan”), as amended, has approximately 12.2 million common shares reserved for issuance. As of June 30, 2024, there were approximately 5.4 million shares available for issuance under the Plan. The shares available are after the granting of 2.1 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:

	For the Years Ended June 30,
	2024			2023
Weighted average expected terms (in years)		5.1			6.0
Weighted average expected volatility		103.3	%		88.8	%
Weighted average risk-free interest rate		4.3	%		3.9	%
Expected dividend yield		0.0	%		0.0	%

The weighted average expected term (in years) in the table above excludes the executive Target Options.

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024 AND 2023

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 primarily non-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, 2024 (including the new grants detailed above) and 2023 (excluding executive Target Options), was approximately $1.53 million and $6.40 million, respectively. Fair value of the executive Target Options granted in 2023 was approximately $8.53 million.

The following is a summary of the Company’s stock option activity for the year ended June 30, 2024 and 2023, excluding the executive Target Options:

				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, $7.00 exercise price, 8.6 remaining term in years, no intrinsic value. Vesting of these is considered remote.

				Weighted Average
						Remaining
				Exercise		Contractual		Intrinsic
	Options			Price		Term (Yrs)		Value
Outstanding at July 1, 2022		4,484,616		$	4.68		7.0	$	2,404,249
Options Granted		2,155,909			5.63		9.6		-
Options Exercised		(104,932	)		3.94		6.1		99,505
Options Forfeited / Cancelled		(407,212	)		7.39		8.5		28,830
Outstanding at June 30, 2023		6,128,381		$	4.84		7.0	$	1,676,966
Exercisable at June 30, 2023		3,741,523		$	3.96		5.6	$	1,676,966

The above table excludes executive Target Options: 2,100,000 granted, $7.00 exercise price, 9.7 remaining term in years, no intrinsic value. Vesting of these is considered remote.

The intrinsic value of stock options at June 30, 2024 and 2023 was computed using a fair market value of the common stock of $1.02 per share and $3.56 per share, respectively.

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024 AND 2023

The Company’s stock option-based expense for the years ended June 30, 2024 and 2023 consisted of the following:

	For the Years Ended
	June 30,
	2024		2023
Stock option-based expense :
Research and development expenses	$	731,638	$	1,717,955
General and administrative expenses		346,309		299,664
Sales and marketing expenses		349,377		833,817
Cost of goods sold		-		755
Board option expense		179,950		441,754
Total	$	1,607,275	$	3,293,945

There is no expense included for the executive officers’ Target Options.

At June 30, 2024 total unrecognized compensation expense to employees, board members and vendors related to stock options was approximately $2.67 million (excluding executive Target Options of $8.53 million) and is expected to be recognized over a weighted average period of 2.06 years (which excludes the executive Target Options).