EQUITY

3 Months Ended

Sep. 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 $2.98 million on October 3, 2023. The net proceeds are recorded as a subscription receivable on the condensed consolidated statement of stockholders’ equity for the three months ended September 30, 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 Employees as Compensation

During the three months ended September 30, 2024, the Company issued 8,000 shares of common stock to an employee as compensation and recorded share-based compensation of approximately $0.01 million in sales and marketing expenses on the condensed consolidated statement of operations.

THE GLIMPSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended September 30, 2023, the Company issued approximately 55,000 shares of common stock to various employees as compensation and recorded share-based compensation of approximately $0.20 million in general and administrative and sales and marketing expenses on the condensed consolidated statement of operations.

Common stock issued to Vendors

During the three months ended September 30, 2023, the Company issued approximately 11,000 shares of common stock to various vendors for services performed and recorded share-based compensation of approximately $0.03 million, primarily in sales and marketing expenses on the condensed consolidated statement of operations.

Common stock issued for Exercise of Stock Options

During the three months ended September 30, 2023, 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.

Common stock issued to satisfy Contingent Acquisition Obligations

During the three months ended September 30, 2023, the Company issued approximately 36,000 shares of common stock, with a fair value of approximately $0.13 million, to satisfy a contingent acquisition obligation for the achievement of a revenue performance milestone by XRT.

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.

	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 2.20 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 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 September 30, 2024, there were approximately 5.6 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.

THE GLIMPSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Three Months Ended September 30,
	2024			2023
Weighted average expected terms (in years)		6.0			6.5
Weighted average expected volatility		99.5	%		97.8	%
Weighted average risk-free interest rate		4.4	%		4.6	%
Expected dividend yield		0.0	%		0.0	%

The grant date fair value for options granted during the three months ended September 30, 2024 and 2023 was approximately $0.10 million and $0.40 million, respectively.

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

				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		147,000			2.50		9.8		-
Options Exercised		-			-		0.0		-
Options Forfeited / Cancelled		(276,488	)		4.15		8.5		-
Outstanding at September 30, 2024		3,514,392		$	3.88		6.2	$	-
Exercisable at September 30, 2024		1,979,073		$	4.03		4.9	$	-

The above table excludes executive Target Options: 1,980,000 granted, $7.00 exercise price, 8.4 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, 2023		6,128,381		$	4.84		7.0	$	1,676,966
Options Granted		259,747			2.57		10.0		102,407
Options Exercised		(25,000	)		2.00		3.1		22,741
Options Forfeited / Cancelled		(609,977	)		4.79		6.9		102,407
Outstanding at September 30, 2023		5,753,151		$	4.76		7.0	$	-
Exercisable at September 30, 2023		3,585,072		$	4.16		5.6	$	-

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, 9.7 remaining term in years, no intrinsic value. Vesting of these is considered remote.

The intrinsic value of stock options at September 30, 2024 and 2023 was computed using a fair market value of the common stock of $0.76 per share and $1.84 per share, respectively.

THE GLIMPSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

	For the Three Months Ended
	September 30,
	2024		2023
Stock option-based expense:
Research and development expenses	$	139,190	$	271,129
General and administrative expenses		113,008		97,726
Sales and marketing expenses		94,068		153,424
Board option expense		12,460		74,101
Total	$	358,726	$	596,380

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

At September 30, 2024 total unrecognized compensation expense to employees, board members and vendors related to stock options was approximately $2.06 million (excluding executive Target Options of $8.53 million) and is expected to be recognized over a weighted average period of 1.88 years (which excludes the executive Target Options).