COMMITMENTS AND CONTINGENCIES

3 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 11. COMMITMENTS AND CONTINGENCIES

Lease Costs

The Company made cash payments for all operating leases for the three months ended September 30, 2024 and 2023, of approximately $0.19 million and $0.20 million, respectively, which were included in cash flows from operating activities within the condensed consolidated statements of cash flows. As of September 30, 2024, the Company’s operating leases have a weighted average remaining lease term of 1.03 years and weighted average discount rate of 8.56%.

The total rent expense for all operating leases for the three months ended September 30, 2024 and 2023, was approximately $0.11 million and $0.11 million, respectively, with short-term leases making up an immaterial portion of such expenses.

Lease Commitments

The Company has various operating leases for its offices. These existing leases have remaining lease terms ranging from approximately 0 to 2 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 reasonably certain to renew.

Future approximate undiscounted lease payments for the Company’s operating lease liabilities and a reconciliation of these payments to its operating lease liabilities as of September 30, 2024 are as follows:

Years Ended June 30,
2025 (9 remaining months)		217,000
2026		185,000
Total future minimum lease commitments, including short-term leases		402,000
Less: future minimum lease payments of short -term leases		(8,000	)
Less: imputed interest		(24,000	)
Present value of future minimum lease payments, excluding short term leases	$	370,000
Current portion of operating lease liabilities	$	233,000
Non-current portion of operating lease liabilities		137,000
Total operating lease liability	$	370,000

THE GLIMPSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contingent Consideration for Acquisitions

Contingent consideration for acquisitions, consists of the following as of September 30 and June 30, 2024, respectively (see Note 7):

	As of September 30,		As of June 30,
	2024		2024
BLI, current portion	$	2,914,490	$	1,431,761
XRT		-		35,714
Subtotal current portion		2,914,490		1,467,475
BLI, net of current portion		-		1,413,696
Total contingent consideration for acquisitions	$	2,914,490	$	2,881,171

S5D has 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 is remote and all earned consideration has been paid. Accordingly, there is no future contingent consideration recorded related to the S5D acquisition as of September 30 and June 30, 2024. The range of potential additional contingent consideration related to S5D in excess of the amounts reflected on the balance sheet at September 30, 2024 is zero to $10.0 million (which is considered remote and no provision is made for it) in the form of Company common stock (with share conversion at a $7.00 per share floor price). The contingent consideration payout period ends January 2025.

The range of potential contingent consideration related to the previous divestiture of AUGGD assets at September 30, 2024 is zero to $0.20 million (which is considered remote and no provision is made for it) payable in the form of Company common stock (with share conversion at a $7.00 per share floor price). The contingent consideration payout period ends December 2024.

Potential Future Distributions Upon Divestiture or Sale

In some instances, upon a divestiture or sale of a subsidiary company or capital raise into subsidiary company, the Company is contractually obligated to distribute a portion of the net proceeds or capital raise to the senior management team of the divested subsidiary company.