PROVISION FOR INCOME TAXES

12 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

PROVISION FOR INCOME TAXES

NOTE 11. PROVISION FOR INCOME TAXES

The components of loss before provision for income taxes for the years ended June 30, 2024 and 2023 were as follows:

	For the Years ended June 30,
	2024			2023
Loss subject to domestic income taxes	$	(4,195,185	)	$	(25,743,631	)
Loss subject to foreign income taxes		(2,199,110	)		(2,819,652	)
Total loss	$	(6,394,295	)	$	(28,563,283	)

The Company recorded provision for foreign income taxes for the years ended June 30, 2024 and 2023 consists of the following:

	For the Years ended June 30,
	2024			2023
Current	$	38,588		$	0
Deferred		(38,588	)		0
Total provision for income taxes	$	0		$	0

There was no current or deferred income tax provision for the years ended June 30, 2024 and 2023.

The reconciliation of taxes at the U.S. federal statutory rate to our provision for income taxes for the two years ended June 30, 2024 and 2023 were as follows:

	For the Years ended June 30,
	2024			2023
Statutory Federal income tax rate		(21.00	)%		(21.00	)%
State and Local taxes, net of Federal tax benefit		(10.15	)%		(10.15	)%
Stock based compensation expense (ISO)		3.46	%		3.21	%
Foreign tax rate differential		(4.00	)%		(4.00	)%
GAAP to Statutory		13.76	%		(0	)%
Change in valuation allowance		17.93	%		31.94	%
Income Taxes Provision		0.00	%		0.00	%

The Company had deferred tax assets as of June 30, 2024 and 2023 as follows:

	As of			As of
	June 30, 2024			June 30, 2023
Net-operating loss carryforward	$	9,347,624		$	9,243,620
Goodwill and intangible asset impairment		2,949,790			2,399,309
Stock based compensation		306,274			368,831
Other		1,610,589			1,025,503
Total Deferred Tax Assets		14,214,277			13,037,263
Valuation allowance		(14,175,689	)		(13,037,263	)
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. At June 30, 2024, the Company had aggregate net operating loss carryforwards (“NOLs”) of approximately $85.05 million. Federal NOLs for the periods ending June 30, 2018 and prior ($2.88 million) begin to expire in 2037. Federal NOLs for the years ending June 30, 2019 through 2024 ($35.56 million) have no expiration. State NOLs for California and Virginia at June 30, 2024 of $24.19 million begin to expire in 2029. New York state NOLs at June 30, 2024 of $22.42 million 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 Company’s 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 Company’s deferred tax assets, the Company has provided a valuation allowance for the full amount of the deferred tax assets at June 30, 2024 and June 30, 2023.

The Company’s valuation allowance during the years ended June 30, 2024 and 2023 increased by approximately $1.14 million and $9.43 million, respectively.

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024 AND 2023

Upon completion of its 2023 (for fiscal year ending June 30, 2024) 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.

Uncertain Tax Positions

The following table summarizes the activity related to unrecognized tax benefits for the years ended June 30, 2024 and 2023:

	For the Years ended June 30,
	2024		2023
Unrecognized tax benefit -beginning of year	$	0	$	0
Gross increases – prior year tax positions		0		0
Gross decreases – prior year tax positions		0		0
Gross increases – current year tax positions		38,588		0
Gross decreases – current year tax positions		0		0
Statute lapse		0		0
Unrecognized tax benefit – end of year	$	38,588	$	0

At June 30, 2024 and 2023, the total amount of unrecognized tax benefits of $38,588 and $0, respectively, if recognized for respective periods would favorably impact the Company’s effective tax rate. The Company does not expect a significant change in the total amount of unrecognized tax benefits within the next twelve months.

No interest and penalties were incurred or accrued for the years ended June 30, 2024 and 2023.

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.